What if you bought Sun Microsystems in 1995?
US Tech · Hardware. The hindsight answer, year by year, against the only benchmark that matters.
Could you have picked it? Play4.8× · S&P 500 same money: $14,783
$1,000 in Sun Microsystems at the start of 1995 would be worth about $4,750 today. A plain S&P 500 index fund over the same years would have made more — the boring option won.
What happened: Sun Microsystems was swallowed by Oracle in 2010.
The story
Sun Microsystems was founded in 1982, its name derived from the Stanford University Network, and it made powerful Unix workstations and servers. In the 1990s it also gave the world the Java programming language, and during the internet boom its servers ran a large part of the web, prompting the advertising boast that Sun was the dot in dot-com. Investors agreed: the shares rose roughly twentyfold between 1995 and the 2000 peak.
The bust was brutal. Dot-com customers vanished, and the second-hand market filled with barely used Sun servers. Meanwhile cheaper computers running Intel chips and the free Linux operating system did most of what Sun's expensive machines could. The stock fell more than 90 percent by 2003, and despite a strategy of open-sourcing its software, Sun never recovered its margins. In 2009 talks with IBM collapsed, and Oracle agreed to buy the company for 9.50 dollars a share, completing the deal in 2010. Oracle mostly wanted Java and the Solaris operating system.
The lesson: Premium hardware is vulnerable to good-enough alternatives; Sun's expensive servers lost to cheap commodity machines once the boom-time spending stopped.
$1,000 invested at the start of each year
| Bought in | Price then | Worth today | S&P 500 would be | Multiple |
|---|---|---|---|---|
| 1995 | $2.00 | $4,750 | $14,783 | 4.8× |
| 2000 | $40.00 | $238 | $4,626 | 0.2× |
| 2003 | $3.00 | $3,167 | $7,727 | 3.2× |
| 2005 | $4.00 | $2,375 | $5,763 | 2.4× |
| 2007 | $5.50 | $1,727 | $4,789 | 1.7× |
| 2008 | $18.00 | $528 | $4,626 | 0.5× |
| 2010 | $9.50 | $1,000 | $6,071 | 1.0× |
| 2012 | $9.50 | $1,000 | $5,312 | 1.0× |
| 2015 | $9.50 | $1,000 | $3,301 | 1.0× |
| 2018 | $9.50 | $1,000 | $2,519 | 1.0× |
| 2020 | $9.50 | $1,000 | $2,092 | 1.0× |
green = beat the S&P 500 · red = lost money
Best entry point in our set: 1995, turning $1,000 into $4,750. The S&P 500 from that same year: $14,783.
Now try it without hindsight. The wheel decides the year and the asset class, you pick the position, ten seconds a pick, and we simulate to today. Sun Microsystems is one of 258 positions on the wheel — including the ones that went to zero.
Play Sixty-40More in US Tech
- What if you bought Apple?
- What if you bought Microsoft?
- What if you bought Amazon?
- What if you bought Nvidia?
- What if you bought Google / Alphabet?
- What if you bought Facebook / Meta?