Nvidia is the latest poster child on Wall Street for “10 baggers,” stocks that soar in price 10 times. But the AI chipmaker’s path to ” 10-bagger ” status included what is also a typical slump (or two) along the way, according to Trivariate Research. The dominant maker of artificial intelligence processors is among the most recent names to climb 10-fold over five years, earning it the coveted 10-bagger designation, according to Trivariate founder and former Morgan Stanley chief U.S. equity strategist Adam Parker. But the history of these stocks also gave Parker a cautionary tale for investors searching for similar, spectacular returns: “no pain, no gain.” In an analysis of 84 ten-baggers, Trivariate found that the average high-performing stock also saw a drawdown of 48% on this journey, with the typical downturn lasting 114 days. “On your path to a 10-bagger, investors are very likely to experience a 6-month period where their big winning stock [gets cut] in half,” Parker wrote in a note to clients last week. To find the 84 stocks, Parker looked for names with market capitalizations over $2 billion and average daily trading volume of at least $30 million. He then screened for stocks that achieved 10-bagger status, and further culled the list to only those that accomplished the feat in the past 25 years. The chart below contains the names that achieved 10-bagger status most recently, along with information on their drawdowns. Note that some names appear more than once if they’ve risen 10-fold during two separate five-year periods. In Nvidia’s case, the stock climbed more than 1050% in a five-year period starting in 2018. During that time, however, shares also saw a pullback that lasted more than 220 days and at one point pulled down the Jensen Huang-led stock by 66%. Other stocks, such as Shopify , saw more concentrated declines that lasted an even shorter time. The e-commerce technology company soared more than 3500% in a five-year period that started in 2016, for example, but collapsed as much as 41% during a correction that lasted just 18 days in 2020. On the other hand, Tesla saw a downturn that lasted more than 360 trading days that at one point dragged down the electric vehicle maker’s stock by 50%. Still, Tesla soared more than 1050% over five years starting in 2012.
