A decade is an accumulation of several socio-economic trends that end up determining the types of stocks that do well in that period of time. Since 2010, the U.S experienced its longest economic expansion. Furthermore, the financial crisis in the past decade has cultivated a culture of innovation and disruption. The S&P 500 (a weighted index of the largest 500 U.S publicly traded companies) only experienced two years of losses in this time and returned nearly 185% since 2010.
Major trends included technology companies taking over other industries in line with consumer demands for speed and convenience in their day to day activities. This also led to the semiconductor industry being the best performing industry due to the massive surge in data centers and cloud computing.
Based on CNBC’s analysis and screening, these companies turned out to be the best performing stocks in the S&P 500 in the past decade; 2010-2020. This data ranks companies based on highest total returns, which includes their dividend, if they pay them.
- MarketAxess Holdings
- Regeneron Pharmaceuticals
- United Rentals
- Take-Two Interactive Software
- TransDigm Group
- Align Technology
Some significant themes we can pick up from this list is the unignorable effect of technology in all industries. Netflix replaced traditional media houses to revolutionize the streaming service industry. This transformed Netflix’s stock value from $7 in 2010 to $300 today. As aforementioned, Broadcom and NVIDIA made the list as semiconductor manufacturers, making chips for smartphones, storage markets, cloud data centers and telecoms. ABIOMED and Regeneron Pharmaceuticals both actively use technology to drive their healthcare operations. These trends make it clear that investing in technology and perhaps even artificial intelligence can reap long term benefits. These observations are demonstrated even in companies outside the S&P 500. Domino’s Pizza went from a stock price below $10 to $286 as it decided to capitalize on and master using technology to deliver pizza. They outperformed giants like Apple, Google and Amazon this decade. Their CEO even said that “Domino’s is a tech company that just happens to sell pizzas” really emphasizing technology has played in the best stocks of the decade.
The biggest takeaway from the stock market performance of the past decade is that while there are not many familiar names in the top 10, their massive returns were totally driven by their technology based approaches in their respective industries.