The Motley Foolยท2025-10-19 11:15Core Insights - The article highlights the top five best-performing stocks in the S&P 500 over the past decade, showcasing significant growth rates and their involvement in the semiconductor and AI sectors [2][3]. Group 1: Company Performance - Nvidia has seen a staggering increase of 26,927% over the last decade, with a market value of $4.4 trillion and an average annual growth rate of about 75%. The company is heavily involved in AI and data center chips, benefiting from a partnership with OpenAI [3][4]. - Advanced Micro Devices (AMD) has grown by 10,971% over the past ten years, with an average annual growth rate of 60%. AMD is also partnered with OpenAI and is gaining market share in PC CPUs [5][6]. - Broadcom has increased by 3,666% in value, with an average annual growth rate of nearly 41%. The company produces both semiconductor and software products and is expected to benefit from AI growth [7][8]. - Arista Networks has experienced a growth of 3,253% over the past decade, with an average annual growth rate of 42%. The company specializes in networking equipment for data centers [9][10]. - Axon Enterprise has seen a growth of 2,890% with an average annual gain of nearly 41%. The company focuses on public safety hardware and software, including body cameras and drones [11][12]. Group 2: Valuation Insights - Nvidia's stock is considered reasonably valued with a forward P/E ratio of 28, below its five-year average of 39 [4]. - AMD's shares are also reasonably valued, with a forward P/E of 35, slightly above its five-year average of 30 [6]. - Broadcom's stock appears overvalued with a forward P/E of 37, significantly above its five-year average of 19 [8]. - Arista Networks' shares seem overvalued with a forward P/E ratio of 42, above its five-year average of 32 [10]. - Axon Enterprise's shares are viewed as overvalued, with a forward P/E of 83, well above its five-year average of 74 [12]. Group 3: Investment Options - For investors interested in semiconductor and data center stocks, an exchange-traded fund (ETF) like the iShares Semiconductor ETF (NASDAQ: SOXX) is suggested, which includes major companies like AMD, Broadcom, and Nvidia [13].