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Large-cap techs poised to beat Google's run

Google has been an investor favorite since its initial public offering a decade ago, but it isn't even the most successful tech stock to offer since then.

The Mountain View, California-based company has come a long way from its split-adjusted IPO price of $42.54 on Aug. 19, 2004. Class A shares have increased more than 1,300 percent, giving investors a healthy 28 percent annualized return.

But even with these massive yields, Google takes second place among the top-performing large-cap tech IPOs over the past decade.

Of the 65 companies currently in the S&P technology sector, five companies have gone public since Google's debut one decade ago.

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The top-performing stock in the tech sector since then is MasterCard, up 1,864 percent from its IPO on March 25, 2006. MasterCard debuted at just $3.90 a share; now analysts have an average price target of $88.52 on the stock, according to FactSet.

Evercore Partners' David Togut maintains a "buy" rating on the stock with a $91 price target.

"With a strong balance sheet holding $5.7 billion of cash and equivalents and available-for-sale securities with $1.5 billion of debt, MasterCard enjoys a solid financial position," Togut said in a recent Evercore note.

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MasterCard also takes first place for the largest annualized returns since its IPO, offering investors a 41 percent return.

In third place for performance and yearly return is semiconductor device supplier Avago Technologies. The stock is up 410 percent since its IPO in March 2009 and offers an annualized return of 37 percent. Analysts remain bullish on Avago, predicting a 6 percent upside in the stock, according to FactSet.

Visa, First Solar and Facebook round out the list of large-cap tech IPOs since Google. Among those companies, Facebook and Visa are poised to surpass Google in their 10-year performance, with each stock delivering heftier annualized returns in excess of Google's 28 percent.

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As far as Google, many analysts think the stock's bull run is just beginning. Analysts on average are factoring in a 12.6 percent upside for the tech giant's stock. Shebly Seyrafi of FBN Securities has a $700 price target on Google, citing strong site click and international growth. Others like Brian Wieser of Pivotal Research remain more cautious.

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"The company is continually investing in spheres that are only sometimes partially adjacent to their core business, and they are using a substantial amount of capital to do this," Wieser said. "Collectively, the business' profile will be lower margin in the future than it is now and it will remain highly capital intensive going forward."

Large Cap Tech IPOs

Company
IPO Date
% Chg.
Since IPO
Annualized
Return
Mastercard
Incorporated
Class A
5/25/2006 1864% 41%
Google Inc.
Class A
8/19/2004 1303% 28%
Avago
Technologies
Limited
8/6/2009 410% 37%
Visa Inc.
Class A
3/19/2008 390% 24%
First Solar, Inc. 11/17/2006 254% 14%
Facebook, Inc.
Class A
5/18/2012 98% 35%

—By CNBC's Elizabeth Schulze and Dominic Chu. CNBC's Giovanny Moreano contributed reporting.

  • Patti Domm

    Patti Domm is CNBC Executive Editor, News, responsible for news coverage of the markets and economy.

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