These 3 Stocks Have Crushed the Market, and the Next 10 Years Could Be Even Better

When you're looking for top-performing stocks, "Magnificent Seven" names like Nvidia or Tesla may be the ones that first come to mind. Yet while such investments have performed well over the past decade, scores of stocks across many industries have generated returns equal to or greater than those of these technology behemoths.

Furthermore, while those tech-focused megacaps may have benefited greatly from the emergence of the generative artificial intelligence (AI) megatrend, it is possible that they'll generate far more modest gains from here.

However, certain top-performing stocks have the durable competitive advantages to keep outpacing the market in the decade ahead. Here's why I think that group includes Costco (NASDAQ: COST), Intuitive Surgical (NASDAQ: ISRG), and Visa (NYSE: V).

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Don't let a rich valuation keep you out of Costco stock

Over the past 10 years, Costco shares have generated total returns of over 671%, vastly exceeding the S&P 500's more than 281% return during the same time frame.

In other words, a $10,000 investment in this consumer staples stock made in 2016 would be worth over $77,100 today (assuming dividend reinvestment), while an identical position opened in an S&P 500 index fund would be worth just a little over $28,000.

Yet, given Costco's rich valuation of around 50 times forward earnings, some investors are concerned that the stock will no longer be the top performer it's been in the past. That's a significant premium over peers such as Target and Walmart. However, there may be a path for Costco to sustain this valuation, and for its share price to continue climbing alongside earnings growth.

Costco's membership fees, sticky and subject to increases, remain the company's main source of its profits. With overseas markets and the e-commerce channel still underpenetrated, Costco remains well positioned to produce annualized earnings growth in the low double-digit percentages, in line with analysts' current consensus estimates. Costco's dividend could also become a greater contributor to its total returns. While the stock has a forward yield of just 0.5%, its annual payout growth has averaged nearly 13% over the past five years.

Intuitive Surgical still has a significant runway

Intuitive Surgical is best known for its flagship product, the da Vinci robotic surgery system. These devices enable surgeons to perform a variety of surgeries using minimally invasive, high-precision techniques that result in faster patient recoveries. The product line's success has underpinned Intuitive's long-term stock price performance.

Over the past decade, this stock has delivered total returns of over 250%, nearly double those of the S&P 500. Better yet, there is still plenty more room for shares to run in the decade ahead.

While it's true that recently, factors like a cybersecurity incident have weighed on shares, such temporary tailwinds pale in comparison to the long-term growth story. Intuitive Surgical may have a market cap of over $160 billion and annual revenues topping $10 billion, but in terms of market penetration, the medical device company has yet to scratch the surface of its potential. Over 3 million surgeries are performed using da Vinci systems each year. However, between opportunities overseas, where use of this surgical technology is not yet as widespread, and further regulatory clearances for its use in additional specific surgeries, the total addressable market for this product is likely many times its current size.

Given that the growth tailwinds behind Intuitive are likely to persist, it's reasonable to expect the market to continue valuing the stock at a pricey 45 times forward earnings. Even if there's less room for valuation expansion now, this stock could continue to grow steadily in line with the company's earnings growth. And forecasts predict annual earnings growth in the 12% to 14% range in 2026 and 2027.

Visa's key growth driver remains intact

Visa shares have generated total returns of 316% since 2016. This may be only slightly above total returns generated by the S&P 500 index during the same period, but I don't view this as a reason to believe that the company's growth story has reached its final chapter.

Sure, shares of Visa and other credit card processing network operators like Mastercard have tanked for various reasons, including the fear that their businesses could face disruption from stablecoin-powered competition. However, what matters most with Visa is that the underlying trend driving its growth remains intact: the digitalization of everyday payments globally.

In the United States and Europe, debit and credit cards have replaced cash as the payment methods of choice for a majority of consumer transactions. This trend has been key in Visa's steady growth in recent decades. However, that trend is only starting to play out in Africa, Latin America, and Southeast Asia. This is good news for long-term Visa shareholders, and even greater news for investors just buying in today.

Despite forecasts continuing to call for low double-digit earnings growth, Visa shares trade at just 23.5 times forward earnings, a level at the low end of the stock's historic valuation range. In time, the temporary headwinds that have been holding the stock back will subside, attention will shift back to Visa's long-term growth catalysts, and the stock could rally due to increased earnings and valuation expansion. Visa also has a strong dividend growth track record. While its forward yield is only 0.9%, Visa has raised its payout 18 years in a row, with dividend growth averaging nearly 15% over the past five years.

Thomas Niel has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Costco Wholesale, Intuitive Surgical, Mastercard, Nvidia, Target, Tesla, Visa, and Walmart. The Motley Fool recommends the following options: long January 2028 $520 calls on Intuitive Surgical and short January 2028 $530 calls on Intuitive Surgical. The Motley Fool has a disclosure policy.