Google (GOOG) stock went public 10 years ago today, and to say it’s been a good investment is a world of understatement. But it actually hasn’t been the best tech stock over the last decade. Not by a long shot.
Google offered GOOG stock at $85 per share 10 years ago. It sold more than 14 million shares owned by the company itself and raised $1.7 billion. Google stock closed that first day of trading at $50.22 after adjusting for splits — and it hasn’t looked back ever since. Indeed, Google stock has never fallen below the IPO price.
Cut to today, and GOOG has been an absolute market-crusher. Google stock is up more than 1,000% on an adjusted basis since its initial public offering. That’s good for an annualized gain of more than 28%.
As for the S&P 500, the market benchmark gained 80% over the last decade on a price basis. That comes to an annualized gain of 6%. Even after excluding inflation, the broader market hasn’t been pulling its weight for folks’ retirement portfolios.
Google stock, on the other hand, has been a wealth-maker. With a market cap of more than $400 billion, Google is now the third-most-valuable company in the world, after Apple (AAPL) and Exxon Mobil (XOM).
The market cap reflects an explosion in revenue. Google’s top line has grown to an estimated $180 billion this year from $3 billion back in 2004. Along the way, the number of Google employees grew to more than 50,000 — growing by a factor of 20. And Google has been an acquisition machine, scooping up more than 250 companies since going public.
Google Stock vs. the Competition
As impressive a run as it has been, Google stock is neither the best giant stock a decade after going public, or even the best tech behemoth over the last 10 years. Google is up 11-fold in its first decade of trading, but Amazon (AMZN) rose 40-fold in its first 10 years. But even that can’t beat Microsoft (MSFT), which put up a 60-fold gain from 1986 to 1996.
Apple, on the other hand, only tripled in its first 10 years of trading. Over the last decade, however, AAPL stock has destroyed everything in its path. Just have a look at this chart comparing AAPL stock, GOOG, MSFT, AMZN stock and the S&P 500 over the last 10 years:
Click to Enlarge Google stock looks great with that 1,000% gain, but AAPL beat it by several thousand percentage points.
GOOG has been a terrific holding since it went public 10 years ago, with ample reasons to expect more upside ahead.
But as fun as it is to celebrate Google stock on its 10-year anniversary, let’s not forget that AAPL stock won the decade.
As of this writing, Dan Burrows did not hold a position in any of the aforementioned securities.