Investors crowding into the very biggest stocks are betting tech giants can buck market history

Key Points
  • Stocks that make it into the top ten most valuable companies list typically underperform the broader market in the long term, according to Dimensional Fund Advisors. 
  • "A strong company is not the same thing as a strong investment," Wes Crill, Senior Researcher at Dimensional Fund Advisors, told CNBC.
  • Apple is an exception to this trend. The Tim Cook-led juggernaut joined the "top ten largest companies" club in 2010 and ten years later the stock was up more than 1,000% or nearly 30% annually, more than the broader market. 
  • Some investors see the current market as a new age of giants that will dominate for decades, but that would go against history. 
Apple CEO Tim Cook delivers the keynote address during the 2020 Apple Worldwide Developers Conference (WWDC) at Steve Jobs Theater in Cupertino, California.
Brooks Kraft/Apple Inc/Handout via Reuters

Most investors are banking on the high-flying technology darlings to fuel their portfolios for years to come. 

But history shows that the top 10 most valuable companies in the stock market tend to underperform in the long term, calling into question whether the technology giants dominating the market today will fall out of fortune as many leaders have in the past.

Or, will this time be different with these seemingly infallible leaders — like Apple — staying the next decade-long winners?