The 5 Best-Performing S&P 500 Stocks of the Last Decade — Including Nvidia and Broadcom

A stock’s past performance does not guarantee any kind of future returns. But it’s not crazy to look at the best-performing stocks over some period to see which companies were on fire — and then to dive into them to see how promising their growth potential appears to be.

Here, then, is a quick review of the five best-performing stocks in the S&P 500 over the past decade. Note that since they’re from the S&P 500 index of 500 of America’s biggest companies, these will not be small enterprises.

1. Nvidia, up 26,927%

Nvidia (NVDA 0.86%) is the 800-pound gorilla in the semiconductor world, with a recent market value of $4.4 trillion — a not-entirely surprising size, given its torrid growth in recent years. That total growth amounts to an average annual rate of about 75%.

Long known as a gaming-chip company, Nvidia is now heavily involved in the artificial intelligence (AI) boom and is cranking out chips for data centers. One tailwind is a partnership with AI giant OpenAI.

Can Nvidia keep growing? Certainly, though most likely not quite as rapidly. Its stock appears reasonably valued, with a recent forward-looking price-to-earnings (P/E) ratio of 28, well below the five-year average of 39.

2. Advanced Micro Devices, up 10,971%

Advanced Micro Devices (AMD -0.63%) is another major semiconductor company, and its average annual growth rate over the past decade comes out to an impressive 60%. (For context, know that the S&P 500 index has averaged annual gains of close to 10% over many decades and close to 15% over the past 10 years.)

AMD also has a partnership with OpenAI, which will help it keep growing — in part via chips for data centers. One of its specialties is chips for PC CPUs, and it has been taking market share from Intel (NASDAQ: INTC) in that arena.

Shares of AMD are also reasonably valued, with a recent forward P/E of 35, a bit above their five-year average of 30.

3. Broadcom, up 3,666%

Broadcom (AVGO -1.24%) has been growing in value over the past decade by an average annual rate of nearly 41%. Yes, it’s another semiconductor company, but also one that churns out software, with its offerings spanning wireless and wired technology, optical products, mainframe software, cybersecurity, and storage, among other things. It’s set to benefit from the growth of AI, too, with its AI division growing briskly.

Broadcom’s third quarter featured revenue up 22% year over year, and management expects fourth-quarter revenue to be up 24%. With a recent forward P/E of 37, well above the five-year average of 19, the stock looks overvalued. It could still deliver a solid performance for long-term investors, though. If you’re nervous about the stock’s valuation, you might just add it to your watch list or buy into it incrementally over time.

4. Arista Networks, up 3,253%

Shares of Arista Networks (ANET -2.01%) have grown at an average annual rate of 42% over the past decade. The company specializes in networking equipment, such as the kind used by data centers. Its second quarter featured revenue growth of 30% year over year, but some have been disappointed that management projections for long-term growth aren’t more robust.

With a recent forward P/E ratio of 42, well above the five-year average of 32, shares seem a bit overvalued, so invest with caution or do so incrementally over time, or just add the stock to your watchlist.

5. Axon Enterprise, up 2890%

Axon Enterprise (AXON 2.86%)has averaged annual gains of nearly 41% over the past decade, and it’s not a specialist in chips or data centers — though it’s investing in AI. It offers hardware and software for public safety, with a cloud-based platform. Specifically, it sells body cameras, in-car cameras for police, tasers, drones, and more.

Its shares definitely appear overvalued, with a recent forward P/E of 83 well above the five-year average of 74 — which is also steep. Its price-to-sales ratio, recently nearly 24, is also very steep, and nearly twice the five-year average of 13. Shares could keep growing from here, but they may also pull back to a more reasonable level.

Playing it safer — via an ETF

If this list has you wanting to be invested in semiconductor- and data center-related stocks, you might want to consider opting for an exchange-traded fund (ETF) that will have you invested in a bunch of them. The iShares Semiconductor ETF (NASDAQ: SOXX), for example, encompasses around 30 stocks, with top ones including AMD, Broadcom, and Nvidia.