Equity Compensation · Research Note
The cost of skipping your ESPP
NVDA NASDAQ REALIZED +$73K · 2025
Current price
$198.50
As of Apr 15, 2026
Discount
15%
24-mo lookback
IRS cap (FMV @ grant)
$25,000
Per calendar year
2025 realized gain
$73,610
If sold at each purchase
Why skipping a 24-month-lookback ESPP at NVDA was a costly choice in 2025
With a 24-month lookback, each 2025 purchase reaches back to 2023/2024 grant prices — before NVDA’s AI-driven re-rating. Participating across calendar year 2025 would have required roughly $21,249 of post-tax payroll and delivered shares worth approximately $94,859 at each purchase date — a realized gain of ~$73,610 (≈346% return on capital). The lookback locked in split-adjusted grant prices of $42.50 and $48.17 while purchases happened at $157.98 and $186.49.
Holding those shares through today at $198.50 would have grown the position to ~$109,894 — a paper gain of ~$88,646 on the same $21,249 contributed. This is the canonical “why lookback matters” case study.
If you skipped: the same $21,249 of payroll stayed in your paycheck — and you forfeited a ~$73,610 same-day gain (or ~$88,646 had you held to today). That’s the opportunity cost of opting out.
What each six-month window actually delivered
Offering Period 01 · 24-mo
Purchased Jun 30, 2025
Grant Jul 3, 2023 → Purchase Jun 30, 2025
Grant Date FMV (24-mo back)$42.50
Purchase Date FMV$157.98
Lookback price (lower)$42.50
Discounted purchase price$36.13
Shares purchased294.12
Payroll contributed$10,624.55
Market value @ purchase$46,464.88
Offering Period 02 · 24-mo
Purchased Dec 31, 2025
Grant Jan 2, 2024 → Purchase Dec 31, 2025
Grant Date FMV (24-mo back)$48.17
Purchase Date FMV$186.49
Lookback price (lower)$48.17
Discounted purchase price$40.94
Shares purchased259.50
Payroll contributed$10,624.03
Market value @ purchase$48,394.16
Opportunity cost · methodology
Total CY2025 opportunity cost
$73,610 realized · $88,646 if held
Breakdown
H1 2025 gain (sold at purchase)+$35,840.33
H2 2025 gain (sold at purchase)+$37,770.13
Realized gain · CY2025+$73,610.46
Total shares (both periods)553.62
Value if held to today @ $198.50$109,894.41
Less: total contributed−$21,248.58
Paper gain · held to today+$88,645.83
Methodology & assumptions
- 24-mo lookback: purchase price = 85% × lower of (offering-start FMV, purchase FMV)
- Grant prices split-adjusted for NVDA’s 10:1 split on Jun 10, 2024
- $25K IRS limit applied as $12,500 FMV-at-grant per 6-month purchase
- Shares = $12,500 ÷ offering-start FMV (the 24-mo-back grant price)
- Period 1 offering: Jul 3, 2023 → Jun 30, 2025 (purchased at period end)
- Period 2 offering: Jan 2, 2024 → Dec 31, 2025 (purchased at period end)
- Gains pre-tax; ordinary income applies to the 15% discount at sale
- §423 plans with 24-mo offerings may require auto-enrollment resets if price drops
Illustrative analysis based on historical closing prices. Not investment, tax, or legal advice. The 24-month lookback is the maximum permitted under §423 and is rare among tech plans. Verify plan terms, offering duration, and reset provisions in your plan document.
Prepared Apr 16, 2026
Equity Comp Desk
Equity Comp Desk