Buying Last Year's Best S&P 500 Stock: A 10-Year Backtest
Published · Data as of 2025-12-31 close. Figures are as of the dates shown and will not be updated.
How this note was made. On 2026-10-21 an AI research agent (Claude Code on a Mac mini, writing and running its own Python) rebuilt this backtest from free data: year-end S&P 500 membership from the open fja05680/sp500 dataset, and split- and dividend-adjusted daily prices from the unofficial Yahoo Finance chart endpoint. It ranked every member by calendar-year total return, then simulated the strategy. Each yearly winner was checked against published year-end reports. The raw output is in the CSV file at the bottom of this page. Read the method: How we test.
Educational sample, not investment advice. This is a test of a historical claim, not a strategy we recommend. Nothing here is a recommendation to buy, sell or hold any security.
The claim
A post we saw shared online says: on the first trading day of each year, buy the previous year's best-performing US stock and hold it for the year. Do that for ten years and you make 85,470% (no decimal point), or 83.5% a year.
Two things are wrong before we touch any data:
- The two numbers do not match each other. +85,470% over ten years is 855.7 times your money. That works out to about 96% a year, not 83.5%. And 83.5% a year for ten years gives about 433 times your money (+43,200%), not 855 times.
- "Best-performing US stock" needs a universe. Across all listed US stocks, the yearly winner is often a micro-cap. We used the S&P 500, the universe almost every "best stock of the year" list uses.
The answer in one paragraph
Over the ten years 2015–2024 the strategy turned $10,000 into about $871,000 (+8,607%, 56% a year), against about $34,000 for the S&P 500 ETF SPY (+242%, 13% a year). That is a remarkable result, but it is roughly one tenth of the claim. Our figure is within 1% of 8,547%, so the viral number may simply have picked up an extra zero. Shift the window one year to 2016–2025 and the strategy made about 200 times its money (+19,900%, 70% a year), still well short of 855 times.
Best-performing S&P 500 stock each year (2014–2025)
Ranked by calendar-year total return (dividends reinvested), among stocks that were in the index at year-end and traded the whole year. Every #1 below matches published year-end reports.
| Year | Stock | Total return |
|---|---|---|
| 2014 | Southwest Airlines (LUV) | +126% |
| 2015 | Netflix (NFLX) | +134% |
| 2016 | NVIDIA (NVDA) | +227% |
| 2017 | NRG Energy (NRG) | +134% |
| 2018 | Advanced Micro Devices (AMD) | +80% |
| 2019 | Advanced Micro Devices (AMD) | +148% |
| 2020 | Tesla (TSLA) | +743% |
| 2021 | Devon Energy (DVN) | +196% |
| 2022 | Occidental Petroleum (OXY) | +119% |
| 2023 | NVIDIA (NVDA) | +239% |
| 2024 | Palantir Technologies (PLTR) | +340% |
| 2025 | Western Digital (WDC) | +284% |
Notes:
- Total return includes dividends, so a few numbers sit above the price-only figures in news reports. Devon was about +179% on price alone in 2021, NRG +132% in 2017 and Southwest +125% in 2014.
- 2017 was close. Align Technology (ALGN) finished about one point behind NRG. That matters later.
- In 2025, SanDisk rose more than Western Digital, and most year-end lists put it first. It only started trading in February 2025 after its spin-off from Western Digital, so it has no full-year return and we left it out.
- We list only the #1. Our price source has no history for some acquired companies, so our lower ranks can be wrong (Activision Blizzard was #3 in 2015 at about +94%, and it is missing from our data).
Year by year: what the strategy actually did
Buy at the opening price on the first trading day, sell at the last close of the year, then switch to the next winner. Total return, no trading costs or taxes.
| Bought on the first day of | Stock (last year's #1) | Return that year | SPY same year | $10,000 becomes |
|---|---|---|---|---|
| 2015 | Southwest Airlines | +1.6% | +0.8% | $10,155 |
| 2016 | Netflix | +13.6% | +13.9% | $11,534 |
| 2017 | NVIDIA | +86.1% | +20.9% | $21,461 |
| 2018 | NRG Energy | +39.1% | −4.9% | $29,863 |
| 2019 | AMD | +154.6% | +33.3% | $76,041 |
| 2020 | AMD | +95.7% | +17.7% | $148,820 |
| 2021 | Tesla | +46.9% | +28.2% | $218,595 |
| 2022 | Devon Energy | +50.6% | −18.4% | $329,108 |
| 2023 | Occidental Petroleum | −3.0% | +25.5% | $319,184 |
| 2024 | NVIDIA | +172.8% | +25.7% | $870,673 |
| 2025 | Palantir | +133.3% | +17.1% | $2,030,999 |
| Window | Strategy | SPY |
|---|---|---|
| 2015–2024 | 87.1x (+8,607%), 56.3% a year | 3.4x (+242%), 13.1% a year |
| 2016–2025 | 200x (+19,900%), 69.9% a year | 4.0x (+297%), 14.8% a year |
Nine of the ten years from 2015 to 2024 made money, and eight beat SPY. The one losing year, Occidental in 2023, came after an oil-price spike.
We do not show the 2026 holding. The year is not over, and this page is a test of a claim, not a live signal.
How fragile is the result?
The headline number depends on choices that look small.
| Change | 2015–2024 result |
|---|---|
| Our base case (buy at the first day's open) | 87.1x |
| Buy at the first day's close instead | 79.4x |
| Buy at the previous year-end close | 82.3x |
| In 2018 hold Align (about one point behind NRG in 2017) instead of NRG | 58.9x |
The last row is the important one. NRG beat Align by about one percentage point in 2017. In 2018 NRG gained 39% and Align lost 6%. That single coin flip moves the ten-year result by a third. A strategy that holds one stock at a time lives and dies on rankings this close.
Why it worked in this decade, and why that is not a promise
The winners kept winning because their profits kept growing. AMD won in 2018 and 2019 while it took share from Intel. NVIDIA won in 2016 and 2023 and also gained more than 100% in 2020 and 2024. Tesla, Palantir and the chip names were driven by sales that compounded for years, not by one-off events. When a winner's rise came from a commodity price (Occidental after the 2022 oil spike), the next year was flat.
The S&P 500 is already a quality filter. A stock needs to be large, profitable and liquid to be in the index. The best stock in the index is usually a large company with a real business behind the move. Run the same rule on all listed stocks and the yearly winner is often a tiny company. We did not test that version, so we make no claim about it.
This was a strong decade for large US growth stocks. SPY more than tripled over 2015–2024 and the biggest gains came from a handful of tech names. A strategy that keeps landing on those names benefits twice: from the market and from the concentration.
What the backtest cannot tell you:
- Ten data points. Each year is one bet on one stock. Our sample has ten (or eleven) such bets. That is not enough to separate skill from luck.
- One decade. We tested 2015–2025 only. Studies of momentum find that the effect comes and goes, and can reverse sharply after market turns.
- A one-stock portfolio can lose most of its value in a year. Nothing in this decade did that, but the strategy has no protection against it.
- No costs, no taxes. Selling a winner every December creates short-term capital gains in a taxable account.
Method and data
- Universe: S&P 500 members at each year-end, from the fja05680/sp500 historical components file. A stock had to have a price at both the previous and the current year-end, so mid-year listings (SanDisk 2025) are excluded.
- Returns: Yahoo Finance adjusted closes (split- and dividend-adjusted). Champion ranking uses December-to-December monthly adjusted closes. The strategy uses daily data: the first session's open (adjusted) to the last session's adjusted close.
- Gaps: about 125 former members that were acquired or delisted have no Yahoo history. They can change the lower ranks, so we only rely on the #1. Each year's #1 matches published year-end reports (Reuters, Motley Fool, CNBC, Axios, Benzinga and others; 2025 with the SanDisk caveat above).
- Benchmark: SPY over the same window, same method.
- Not included: trading costs, taxes, and the 2026 holding.
The yearly winners came out of the same kind of agent workflow we use for our other sample research, such as the NVDA earnings review. If you want to see how an AI analyst does when it has to make calls before the results are known, read Can AI pick stocks?.
Sources for the yearly winners (examples)
- 2014: Money, "The Best and Worst Stocks of 2014"
- 2015: Motley Fool, "The 10 Best Stocks in the S&P 500 in 2015"
- 2018 and 2019: Motley Fool, "3 Reasons Why AMD Was the S&P 500's Top Stock in 2019"
- 2020: CNBC, "Here are the top-performing stocks in the S&P 500 for 2020"
- 2024: Motley Fool, top S&P 500 stock of 2024
- 2025: Nasdaq / Zacks, "Here Are the Top-Performing S&P 500 Stocks From 2025"
Download the data behind this note: strategy_by_year.csv (CSV).