Show me an investor who wouldn't love to see his stocks gaining 1,000% in 10 years, and I'll show you a liar. The tech sector happens to be full of extreme growth stocks that actually achieved that extreme 10-year return, and I'm here to show you how it was done.
How good are these gains? The Dow Jones Industrial Average rose 170% over the same period and the S&P 500 market barometer posted a 10-year increase of 186%. The three tech stocks below fared much, much better.
|
Company |
Market Cap |
10-Year Share Price Growth |
|---|---|---|
|
Tucows (TCX +2.60%) |
$647 million |
2,130% |
|
Universal Display (OLED 1.38%) |
$9.7 billion |
1,560% |
|
NVIDIA (NVDA 0.61%) |
$143 billion |
1,150% |
Data source: YCharts.com, Dec. 31, 2019.
Are any of these proven winners staring down another stretch of extreme growth in the years ahead?
Ting, Ting, Ting!
Tucows, a Canada-based provider of online tools and a reseller of cell-phone services, was a mere penny stock 10 years ago. The company's surge started with the announcement of subsidiary Ting Mobile's low-priced data sharing plans in 2012, as smartphones were starting to reshape the way we used our mobile phones.
Three years later, Ting had grown into a profitable business that contributed 29% of Tucows' total revenue and 41% of the company's operating profit. The company has grown by leaps and bounds, thanks to a combination of organic revenue growth from Ting Mobile and several plug-in acquisitions adding heft to Tucows' domain name service operations.
The next big idea out of Tucows' Toronto headquarters is a big investment in Ting Internet. This sister service to Ting Mobile provides fiber-based broadband service to customers in a hand-picked selection of hyperlocal markets. This effort requires a large up-front investment to pull fiber lines into new neighborhoods and lighting up data centers to provide services to these markets, so Ting Internet is a drag on Tucows' earnings at the moment. But customers are quick to sign up when Ting Internet services become available: The service was available to 34,000 addresses in the recently reported third quarter, and 9,500 of these potential clients are already paying customers.
The Ting Internet project will continue to expand for years to come, giving Tucows a predictable stream of incoming high-quality customers for the long haul. The next decade probably won't match the once-in-a-lifetime run from penny stock to respectable multi-service growth investment, but Tucows still looks promising enough that I had to buy a few shares for myself this fall.
Image source: Getty Images.
The future's so bright, I gotta wear shades
Back in 2009, I saw Universal Display's organic light-emitting diode (OLED) technology finally hitting store shelves after many years of quiet research and development behind the scenes. The ultra-efficient technology seemed to be primed for world domination at the time, and I could hardly conceal my excitement. "Universal Display is small and obscure and can easily multiply your investment many times over when catalysts like the TV revolution kick in," I wrote.
The company's trailing revenue has exploded from $16 million to $374 million over this 10-year period. CEO Steven Abramson believes this is just the start of a much larger long-term growth story.
These days, OLED screens are a standard feature on most flagship smartphones, and the technology is making inroads in the big-screen TV market as well. After that, we Universal Display investors will enjoy watching the world embrace power-efficient OLED panels for everyday lighting, flexible and transparent screens, and much more.
Do the math
NVIDIA's path to a thousand-percent gain was rather bumpy. The stock traded almost exactly sideways between 2010 and 2015, gaining just 7% over that five-year span. The last five years were a different story, where NVIDIA's shares posted a gain of 1,070% on 114% higher revenue and 365% stronger free cash flow.
After several missteps and failed product launches, NVIDIA finally got its act together with a popular lineup of graphics cards in 2015. A brand new graphics architecture, known as Pascal, followed in 2016 to even greater acclaim. These cards stayed hot in 2017, allowing NVIDIA to take advantage of that fall's massive cryptocurrency mining trend -- as it turns out, high-powered graphics cards were very well suited to doing exactly the kind of math that crypto-mining required at the time.
The cryptocurrency surge faded in 2018, dragging NVIDIA's sales and share prices down with it. But the stock is coming on strong again thanks to solid sales into new target markets such as data analysis, self-driving cars, and artificial intelligence systems. NVIDIA's chips are great at these tasks, too.
The stalled gaming market is looking for its next big hit, some market watchers expect another big rush of cryptocurrency gains, and NVIDIA's more recent growth drivers should stay valid for many years. NVIDIA looks like a solid buy today.
