Since its August 2004 initial public offering, Alphabet's (GOOG 2.08%)(GOOGL 1.89%) stock has increased in value by more than 133 times. Its compound annual growth rate has been over 25% during those 21 years, which is as impressive as it gets.
I don't foresee Alphabet maintaining that average over the next couple of decades, but even if we knock over 10% off its growth rate and assume that it averages 15% annual returns over the next 21 years, a single $1,000 investment made today could grow to be worth over $18,000 in that time.
Here's how much a one-time $1,000 investment would grow into, assuming it maintains a 15% compound annual growth rate.
| Years Invested | Investment Value |
|---|---|
| 10 | $4,045 |
| 15 | $8,137 |
| 20 | $16,366 |
| 21 | $18,821 |
| 25 | $32,918 |
Calculations by author. Values rounded to the nearest dollar.
Past results don't guarantee future performance, so I don't want to give the impression that this is a given for Alphabet. Averaging 15% annual returns for two-plus decades will be hard for any company, especially one that is already valued at over $4 trillion. But I believe that Alphabet has all the tools to be a long-term portfolio staple. If it keeps innovation at its core, it'll be in good shape.
