For a stock to turn a $1,000 investment into $1 million, it would need to rally 99,900%. In the past 50 years, the S&P 500 soared 5,240%, making the hunt for such extraordinary growth seem akin to finding a needle in a haystack.
The Evolution of Apple
Apple debuted on the stock market at a split-adjusted price of $0.10 per share in December 1980. A $1,000 investment during its initial public offering (IPO) would now be valued at a staggering $2.28 million. Apple, currently the world’s most valuable publicly traded company with a market cap of $3.47 trillion, was once an underdog in a world of Windows-powered PCs. Its revival under Steve Jobs’ leadership, marked by groundbreaking products like the iMac, iPod, iPhone, and iPad, captivated consumers, sealing their allegiance within Apple’s ecosystem.
After the passing of Steve Jobs in 2011, Tim Cook sustained Apple’s momentum by innovating core products, introducing new gadgets such as the Apple Watch and AirPods, and expanding its service offerings. Apple’s revenue surged at a compound annual growth rate (CAGR) of 17% from 1997 to 2023, showcasing its resilience in the world of technology and hinting at further growth with AI integration.
The Amazonian Journey
Amazon made its pubic debut at a split-adjusted share price of $0.075 in May 1997. An initial $1,000 investment would have blossomed into $2.55 million today. Currently valued at $2.01 trillion, Amazon defied critics who questioned its capital-intensive business model. Over time, economies of scale and the success of Amazon Web Services (AWS) propelled its growth, with revenue skyrocketing at a staggering 37% CAGR from 1997 to 2023.
As Amazon navigates the e-commerce landscape and cloud infrastructure markets, its future prospects appear robust, with potential tailwinds expected from the proliferation of AI applications in the coming years.
Berkshire Hathaway’s Endurance
Established in 1839, Berkshire Hathaway’s modern legacy began with Warren Buffett’s acquisition in 1965. The company listed its Class A shares in an IPO priced at $290 in March 1980. A $1,000 investment in these shares would now be valued at $2.36 million, as Berkshire stands as the world’s eighth most valuable public company with a market cap of $980 billion.
Berkshire’s success stems from its dual engines of growth — a diversified portfolio of recession-resistant businesses and a solid investment portfolio overseen by Warren Buffett. The company’s resilience in weathering economic storms is evident in its consistent outperformance of the S&P 500. Operating earnings grew at a CAGR of 17% from 1980 to 2023, emphasizing the enduring value of Berkshire’s business model.