These High-Growth Stocks Returned £16T To Investors In The Past Decade And 3 Are Still Cheap Buys

Rapid advancements in artificial intelligence (AI) and electronics, due to the growing demand for innovation, connectivity, security, and accessibility, have propelled leading tech companies to new heights over the past decade.

Despite the devastating effects of the pandemic, including global supply chain disruptions and a slump in business activity, alongside geopolitical uncertainty and dynamic business cycles, investors with a tech-heavy portfolio have continued to witness tremendous gains.

Although market volatility has also ramped up amid the global AI race, several US companies have showcased sustained performance over the years, suggesting that these firms could be headed in the right direction.

Best Wealth-Creating Stocks Of The Past 10 Years

Morningstar portfolio strategist Amy Arnott recently compiled a list of the top stocks that have directly created the most value for investors between 2015 and 2024. Her strategy involved shortlisting companies for their economic moats, which could help them stay ahead of stiff competition in the following decades. For instance, AI players are spending billions right now for long-term benefits and securing a bigger market share in the early stages of the AI industry.

Arnott's stock list created massive value over long periods of time. She measured value creation by looking at the biggest increases in market capitalisation in the past ten years, including the value of dividends these companies paid.

Leading chipmaker Nvidia (NASDAQ:NVDA) topped her list. The AI giant created over £2.38 trillion ($3 trillion) in value for investors. It is followed by Apple (NASDAQ:AAPL), Microsoft (NASDAQ:MSFT), Amazon (NASDAQ:AMZN), Alphabet (NASDAQ:GOOGL), Meta Platforms (NASDAQ:META), Tesla (NASDAQ:TSLA), and Broadcom (NASDAQ:AVGO). All these companies created over £793.62 million ($1 trillion) in shareholder value between 2015 and 2024.

Morningstar Thinks Microsoft, Alphabet, and UnitedHealth Group Stocks Are Cheap Buys

While most of the stocks on Arnott's list continue to face volatility and have long been overpriced, Morningstar analysts think three of them are moderately undervalued or trading at discounts to their fair-value projections.

Microsoft's share prices have steadily increased over time, thanks to its critical role in AI innovation and rapidly growing cloud computing platform called Azure. Despite a drop in revenue growth projections from 15.7% in 2024 to 13.2% by 2026, the tech firm's operating margins are expected to increase to 45.1% by 2026 from 44.6% in 2024. It could imply sustained profitability and smart capital spending, an essential attribute amid steep AI expenses. Morningstar's fair value estimate for the Microsoft stock is £388 ($490). Shares were trading at £310 ($391) apiece on 28th February. Morningstar analyst Dan Romanoff's stock price target for Microsoft is based on increasing profitability from Azure, Office 365 E5, and the Power Platform for web and app development.

Meanwhile, Morningstar analyst Malik Ahmed Khan believes that Alphabet will be able to overcome capacity constraints on its cloud platform, which has recently slowed revenue growth. A leader in the cloud computing space, Alphabet is spending heavily on AI development. Khan highlighted the company's strengths, such as its AI-powered search engine and YouTube business. Despite estimates of a slump in revenue, Alphabet's operating margin is expected to expand marginally to 32.3% in 2025. He hiked the stock price target to £188 ($237) after the company beat Q4 earnings expectations. The stock closed at £136 ($172) on Friday.

Lastly, Morningstar senior analyst Julie Utterback thinks that UnitedHealth Group stock price has room to grow despite the surrounding controversies and ongoing investigations. The shooting of the company's former CEO, Brian Thompson, led to a sharp stock price decline. The shares continue to face selling pressure after news broke that an investigation is underway for potential Medicare billing fraud. However, Utterback has set a stock price target of £468 ($590) per share, highlighting that the company made 47% of its operating profits from medical insurance, but only 15% came from Medicare. The stock was trading at £370 ($467) on Friday. She argued that a probe over Medicare shouldn't trigger a massive sell-off. While investors in healthcare stocks should be cautious amid looming changes to healthcare coverage, the analyst added the stock's price is discounted sufficiently to buffer policy uncertainty.

Disclaimer: Our digital media content is for informational purposes only and not investment advice. Please conduct your own analysis or seek professional advice before investing. Remember, investments are subject to market risks and past performance doesn't indicate future returns.