Technology Stars of Yesteryear – Where Are They Now?

June 14, 2018


Remember the tech boom of the 90s? It was a time of excess. Big SUVs, big homes, big stock returns. The Internet was a new and fascinating technology with nowhere to go but up. The future was limitless with seemingly never-ending euphoria.

Come early 2000 however, it did. The dot-com bubble burst hard and the NASDAQ fell from its all-time high of 5,048.62 on March 10, 2000 to a low of 1,114.11 by 2002. It would take over 15 years to reach this peak again.

Fast forward to today, and the economy is once again experiencing huge growth in the tech sector. There is certainly no shortage of headlines as a result:

  • “Netflix is unstoppable” CNN Money, April 2018
  • “Amazon Takes Over the World”, com, September 2017
  • Wake Up! Amazon, Google…and Facebook are Running Our Lives…”, The Guardian, May 2017

The acronym “FANG”, which refers to Facebook, Amazon, Netflix and Google, is now a common term. Back in the 90s if you said FANG, people would look for Buffy the Vampire Slayer.

Turn Back the Dial

We decided to go back in time by selecting a few market favorites from the tech boom era, and analyzed their cumulative returns from March 1, 2000 through May 31, 2018. Did the results match the hype? Did the lofty valuations prove irrelevant in hindsight?

The results:

Cisco Systems: (-21.1%)

By the late 90s, Cisco stood among the technology leaders. 25 years prior, the company didn’t exist. On March 24, 2000 according to, it became the most valuable company in the world. Since then it has lost 21% on a cumulative basis.

GE: (-43.7%)

This is not a misprint. It’s hard to believe this could happen to a multi-generational blue chip. According to a CNN Money’s “Wall St’s Record Century” on December 31, 1999, it had the second largest market capitalization at $519 billion. Since then, it’s lost over 40% of its cumulative value.

Intel: 41.14%

By the late 1990s with the growing personal computer market, Intel became a household name. After 2000, Intel saw slowing demand for its high-end microprocessor, and its stock performance suffered. In contrast the Vanguard Total Bond Market Fund would have returned over twice as much, with a fraction of the risk.

Microsoft: 229.3%

Microsoft is one stock that did recover from the tech boom. However, it would have required a lot of patience and risk tolerance to realize this return. It would have taken investors who bought in on March 1, 2000 years to recoup their initial investment, with lots of ups and downs in the interim.


And what about Apple you ask? 4,460%

Let’s pause a minute here. Recall that at the time, Apple was on the verge of bankruptcy just three years earlier after experiencing 12 years of financial losses according to Business Insider. In fact, it was a classic example of a small value stock. Over time, small value stocks are the best performers. Apple is a perfect example of why.

There is a saying that history tends to repeat itself. In academics, that’s “reversion to the mean” In simple terms, it means results tend to drift back toward the averages over time. Think of it like a rubber band. You can stretch it to a certain limit. Once it’s released, it snaps back. Will the same hold true for the technology sector and the FANGs? It’s impossible to predict, but one thing we do know is that past performance does not indicate future results. Therefore, it is just one more reason why it makes sense to stay diversified.