In this article, we discuss 11 best performing S&P 500 stocks in the last 10 years. If you want to see more stocks in this selection, check out 5 Best Performing S&P 500 Stocks in the Last 10 Years.
While it is important for investors to have a long-term perspective and not get caught up in short-term fluctuations, it is equally important to consider historical context and not base investment decisions solely on recent performance or market headlines. A diversified portfolio and a well thought out investment strategy can help individuals stay focused on their long-term goals and avoid making impulsive decisions based on short-term market movements.
Investors selling off their equities are displaying short sightedness, since latest Morgan Stanley data suggests that the operating margin of the S&P 500 Index stands at 11.6%, which is still close to the record high of 13.1% achieved in late 2021. The present operating margin is also meaningfully higher than pre-pandemic levels of 10.2% and the rolling 10-year average of 9.4%. 2022 nominal revenues for S&P 500 constituents were also 8% greater than the 10-year trend. Similarly, the real inflation-adjusted consumption in 2022 was approximately 7% ahead of its long-term trend.
To build a portfolio that has a chance to beat market volatility and offer stable returns, investors should look out for the top performing S&P 500 stocks over the years. Although past performance is not a measure for future performance, it is helpful to pick up companies that have shown resilience over time and will likely continue to perform well. While some investors choose income stocks to weather a harsh market environment (see 11 Undervalued Dividend Aristocrats to Buy), others seek out defensive equities instead. (see 14 Best Stocks To Buy Before A Recession) Some of the best performing S&P 500 stocks in the last 10 years include NVIDIA Corporation (NASDAQ:NVDA), Tesla, Inc. (NASDAQ:TSLA), and Mastercard Incorporated (NYSE:MA).
Our Methodology
We used a stock screener to scan the S&P 500 index and picked 11 of the best-performing stocks over the past 10 years with most significant gains, as of January 18. However, some of these companies were not operational during the entire ten year period. We scanned Insider Monkey’s database of 920 hedge funds to assess the hedge fund sentiment around these equities. The list is arranged according to the share price returns of each firm.
Photo by Adam Nowakowski on Unsplash
Best Performing S&P 500 Stocks in the Last 10 Years
11. Moderna, Inc. (NASDAQ:MRNA)
Number of Hedge Fund Holders: 44
10-Year Share Price Gains as of January 18: 925.2%
Moderna, Inc. (NASDAQ:MRNA) is an American biotechnology company that discovers, develops, and sells messenger RNA therapeutics and vaccines for the treatment of infectious diseases, immuno-oncology diseases, rare diseases, cardiovascular diseases, and auto-immune diseases worldwide. On January 17, Moderna, Inc. (NASDAQ:MRNA) announced results from a late-stage trial of its investigational respiratory syncytial virus (RSV) vaccine candidate, noting that it met its core efficacy goals. The vaccine candidate, mRNA-1345, indicated an efficacy of 83.7% against RSV lower respiratory tract disease in older adults, the company reported.
On January 11, Deutsche Bank analyst Emmanuel Papadakis raised Moderna, Inc. (NASDAQ:MRNA)’s price target from $185 to $225 and maintained a “Buy” rating on the shares. Despite trimming the company’s fiscal 2024 revenue estimates, the analyst believes that recent news updates have been positive and have contributed to the boost in the price target. However, the analyst also believes that Moderna, Inc. (NASDAQ:MRNA) will incur a loss this year due to planned research and development expenses.
According to Insider Monkey’s data, 44 hedge funds were long Moderna, Inc. (NASDAQ:MRNA) at the end of Q3 2022, compared to 45 funds in the last quarter. Philippe Laffont’s Coatue Management is the biggest stakeholder of the company, with 5.70 million shares worth $674.7 million.
In addition to NVIDIA Corporation (NASDAQ:NVDA), Tesla, Inc. (NASDAQ:TSLA), and Mastercard Incorporated (NYSE:MA), Moderna, Inc. (NASDAQ:MRNA) is one of the best performing stocks over the last decade.
Here is what Baron Funds said about Moderna, Inc. (NASDAQ:MRNA) in its Q3 2022 investor letter:
“Within biotechnology, underperformance of Moderna, Inc. (NASDAQ:MRNA) and lower exposure to this better performing sub-industry weighed the most on relative performance. Shares of Moderna, a leader in the emerging field of mRNA-based vaccines and therapeutics, declined due to increasing uncertainty around what a booster market could look like as COVID shifts away from pandemic status and becomes an increasingly commercial market rather than government funded.”
10. Microsoft Corporation (NASDAQ:MSFT)
Number of Hedge Fund Holders: 269
10-Year Share Price Gains as of January 18: 969.5%
Microsoft Corporation (NASDAQ:MSFT) is one of the best performing S&P 500 stocks, with shares exhibiting 10-year price gains of 969.5% as of January 18. On January 17, Microsoft Corporation (NASDAQ:MSFT) shares rose marginally after the company announced that it was expanding access to ChatGPT through its Azure cloud service. The tech giant disclosed that ChatGPT would be available “soon” via a program called Azure OpenAI Service. Microsoft already has a $1 billion stake in OpenAI, and is in talks to grow its investment in the company by perhaps as much as $10 billion.
On January 18, Morgan Stanley analyst Keith Weiss maintained an Overweight rating and a $307 price target on Microsoft Corporation (NASDAQ:MSFT) shares ahead of the FQ2 earnings report. In a research note, the analyst told investors that Microsoft’s alignment with primary secular trends and benefits from vendor consolidation are likely to result in continued share gains for the company. Weiss also believes that Microsoft’s technology, scale, and distribution advantages contribute to a positive outlook on the company.
According to Insider Monkey’s Q3 data, Microsoft Corporation (NASDAQ:MSFT) was part of 269 hedge fund portfolios, compared to 258 funds in the prior quarter. Bill & Melinda Gates Foundation Trust is the largest stakeholder of the company, with 39.2 million shares worth $9.14 billion.
Fundsmith made the following comment about Microsoft Corporation (NASDAQ:MSFT) in its yearly 2022 investor letter:
“Take the example of Microsoft Corporation (NASDAQ:MSFT) and Intuit. Microsoft shares are currently being valued at a P/E ratio of 25.0 times the consensus EPS estimate for the fiscal year ending June 2023. Meanwhile, Intuit is being valued at 28.4 times the non-GAAP consensus estimate for the fiscal year ending July 2023. Many investors and analysts may accept that Intuit is trading at a higher multiple given expectations of greater growth potential. However, Intuit removes share-based compensation from their non-GAAP EPS whereas Microsoft does not. Given that Intuit’s GAAP EPS guidance for the year ending 31st July 2023 is $6.92–$7.22, its non-GAAP guidance is $13.59–$13.89, and the consensus estimate for 2023 EPS is at $13.69, it seems clear that most sell-side analysts are accepting the company’s non-GAAP adjustments, which includes the removal of some $1.8bn of share-based compensation, in their estimates. If we include the impact of share-based compensation in Intuit’s 2023 EPS to make a more apples-to-apples comparison with Microsoft based upon GAAP EPS, Intuit’s 2023 EPS would be closer to $9, meaning that the shares would be trading at a multiple of about 43 times. I think investors and analysts may find a premium of 14% for Intuit over Microsoft (28.4 times versus 25.0 times) to be reasonable. I’m not so sure they are fully aware that Intuit shares are actually trading at a premium of 73% if share-based compensation is treated in the same manner between the two companies.”
9. T-Mobile US, Inc. (NASDAQ:TMUS)
Number of Hedge Fund Holders: 100
10-Year Share Price Gains as of January 18: 1,060%
T-Mobile US, Inc. (NASDAQ:TMUS) provides mobile communications services in the United States, Puerto Rico, and the United States Virgin Islands. The company offers voice, messaging, and data services to customers in the postpaid, prepaid, and wholesale markets. As of January 18, the 10-year share price gains of T-Mobile US, Inc. (NASDAQ:TMUS) came in at 1,060%, making it one of the best performing S&P 500 constituents.
On January 4, T-Mobile US, Inc. (NASDAQ:TMUS) reported that it added 6.4 million total postpaid customers in 2022, which topped forecasts, and also welcomed 2 million new high speed Internet customers during the year. The company disclosed that it added more high speed Internet customers than competitors like AT&T Inc. (NYSE:T), Verizon Communications Inc. (NYSE:VZ), Comcast Corporation (NASDAQ:CMCSA), and Charter Communications, Inc. (NASDAQ:CHTR) combined.
T-Mobile has announced resilient customer results for Q4, driven by very low customer churn despite some weakness in gross ads, according to JPMorgan analyst Philip Cusick in a research note dated January 5. T-Mobile US, Inc. (NASDAQ:TMUS) is the analyst’s top long-term idea and favorite communications services stock, he reiterated an Overweight rating on the shares with a $200 price target.
According to Insider Monkey’s data, 100 hedge funds held long positions in T-Mobile US, Inc. (NASDAQ:TMUS) at the end of September 2022, compared to 96 funds in the preceding quarter. Warren Buffett’s Berkshire Hathaway is the biggest stakeholder of the company, with 5.2 million shares worth $703.3 million.
In its Q4 2021 investor letter, ClearBridge Investments shared its stance on T-Mobile US, Inc. (NASDAQ:TMUS):
“As mentioned, the communication services sector has come under some pressure, and irrational pricing competition has negatively impacted wireless industry growth and profitability of late, weighing on T-Mobile. Faced with these headwinds, and with pressure from other wireless carriers and cable companies that could cause the company to cede share in subscriber growth in 2022, we exited our position in the fourth quarter.”
8. UnitedHealth Group Incorporated (NYSE:UNH)
Number of Hedge Fund Holders: 110
10-Year Share Price Gains as of January 18: 1,170%
UnitedHealth Group Incorporated (NYSE:UNH) operates as a diversified healthcare company in the United States. On January 13, after posting market-beating Q4 2022 results, UnitedHealth Group reaffirmed its 2023 outlook. The company expects revenues between $357 billion and $360 billion, and adjusted net earnings are forecasted between $24.40 and $24.90 per share, while the consensus came in at $356.17 billion and $24.95, respectively. UnitedHealth Group Incorporated (NYSE:UNH) is one of the best performing stocks over the last ten years.
Loop Capital analyst Joseph France on January 17 raised UnitedHealth Group Incorporated (NYSE:UNH)’s price target from $575 to $590 and maintained a “Buy” rating on the shares. The increase in the price target is due to the company’s “strong” Q4 results and 2023 outlook.
According to Insider Monkey’s third quarter data, 110 hedge funds were bullish on UnitedHealth Group Incorporated (NYSE:UNH) at the end of Q3 2022, compared to 91 funds in the prior quarter. Rajiv Jain’s GQG Partners is the largest stakeholder of the company, with 3.2 million shares worth $1.6 billion.
Here is what Stewart Asset Management has to say about UnitedHealth Group Incorporated (NYSE:UNH) in its Q3 2022 investor letter:
“Looking at the Great Recession which began at year-end 2007 and lasted to mid-year 2009 is helpful too. Our four largest current holdings in the portfolio weathered that period well. UnitedHealth’s (NYSE:UNH) earnings were resilient. While it reported modestly down earnings in 2008, its earnings rebounded quickly to record highs in 2010 and the shares responded strongly in anticipation of this.”
7. Lam Research Corporation (NASDAQ:LRCX)
Number of Hedge Fund Holders: 63
10-Year Share Price Gains as of January 18: 1,240%
Lam Research Corporation (NASDAQ:LRCX) designs, manufactures, refurbishes, and services semiconductor processing equipment used in the fabrication of integrated circuits. Lam Research Corporation (NASDAQ:LRCX) was incorporated in 1980 and is headquartered in Fremont, California. The company distributed a $1.725 per share quarterly dividend to shareholders on January 4. It is one of the best performing S&P 500 members over the last decade, with 10-year share price gains of 1,240% as of January 18.
On January 18, Stifel analyst Brian Chin resumed coverage of Lam Research Corporation (NASDAQ:LRCX) with a Hold rating and a $495 price target. The analyst cited that fundamentals, particularly in the memory market, have rapidly declined, and he expects investments to contract sharply next year, resulting in a drop in overall spending on fab equipment. He believes that Lam Research Corporation (NASDAQ:LRCX)’s leadership position in the memory market will likely become a drag on the business in 2023.
According to Insider Monkey’s Q3 data, 63 hedge funds were long Lam Research Corporation (NASDAQ:LRCX), compared to 56 funds in the prior quarter. Rajiv Jain’s GQG Partners is the biggest position holder in the company, with 3.7 million shares worth $1.37 billion.
Renaissance Investment made the following comment about Lam Research Corporation (NASDAQ:LRCX) in its Q3 2022 investor letter:
“Conversely, we sold our positions in Lam Research Corporation (NASDAQ:LRCX) and Zoetis (ZTS) following a sustained deterioration in fundamental factors. After a qualitative review of Lam Research, we believe the company will face a number of headwinds that could make for an unfavorable risk-reward position, given the highly cyclical nature of its business in a slowing global economy. We are also expecting fundamentals to turn negative as sales and operating profits are poised to decelerate, resulting in negative earnings revisions. While the stock trades at an attractive valuation multiple, we believe that this is more a sign that earnings will decline meaningfully.”
6. ServiceNow, Inc. (NYSE:NOW)
Number of Hedge Fund Holders: 103
10-Year Share Price Gains as of January 18: 1,420%
ServiceNow, Inc. (NYSE:NOW) is a California-based company that provides enterprise cloud computing solutions worldwide. It is one of the top S&P 500 performers over the last decade, with 10-year share price gains of 1,420% as of January 18.
On January 12, Wolfe Research analyst Alex Zukin raised the price target on ServiceNow, Inc. (NYSE:NOW) to $500 from $440 and kept an Outperform rating on the shares. His checks were “so strong on an absolute and relative basis” that he sees ServiceNow, Inc. (NYSE:NOW) having the “best setup” for Q4 earnings among the software stocks he covers, the analyst told investors. The analyst said he would buy the stock given its current valuation.
According to Insider Monkey’s data, 103 hedge funds were bullish on ServiceNow, Inc. (NYSE:NOW) at the end of Q3 2022, compared to 99 funds in the last quarter. Chase Coleman’s Tiger Global Management is the largest position holder in the company, with 1.7 million shares worth nearly $640 million.
Like NVIDIA Corporation (NASDAQ:NVDA), Tesla, Inc. (NASDAQ:TSLA), and Mastercard Incorporated (NYSE:MA), ServiceNow, Inc. (NYSE:NOW) is one of the most popular S&P 500 stocks among elite hedge funds.
Aristotle Atlantic made the following comment about ServiceNow, Inc. (NYSE:NOW) in its Q3 2022 investor letter:
“Underperformance in the third quarter can be attributed to ServiceNow, Inc. (NYSE:NOW)’s slight miss on the second quarter earnings and guidance that was lower than expected for its third quarter outlook. The company is facing headwinds from the weaker macroeconomic conditions and a tempered outlook resulting from elongated sales cycles and an overall slowing software spending environment. These worsening conditions were highlighted by many software companies during the second quarter earnings season. We expect this to be temporary for ServiceNow where the long-term thesis of the company’s platform strategy and relevance to digital transformation strategies remains intact. The stock was also likely impacted by the rapid increase in interest rates during the third quarter and the resulting contraction of multiples on high-growth software stocks.”
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Disclosure: None. 11 Best Performing S&P 500 Stocks in the Last 10 Years is originally published on Insider Monkey.
