In 2021, Zoom Video Communications ZM broke a 7 year winning streak. All but once, those stocks outperformed the S&P 500. The first losing performance since Disney was our debut Company of the Year in 2013 has resulted in a drop in Zoom shares by 46% this year.
We are not apologizing, and we don't think Zoom investors are complaining. The inventions of remote everything and the isolation of self-quarantine were among our 2020 honorees because of the coronaviruses epidemic. In 2020, Zoom had monster returns, when the stock rose 396%. The Zoom shares have gone up 165% since the beginning of 2020 despite the 46% decline this year. Zoom remains part of our everyday lives, with the omicron variant now threatening a Covid revival.
Our 2021 company of the year, Microsoft, is a Goliath compared to the upstart Zoom. Other stocks — Crocs, Macy s, Dick s, Ford — posted higher returns this year. Meme stocks such as GameStop and AMC showed the power of retail traders bucking Wall Street. Moderna and Pfizer paved the way out of the pandemic with their vaccines. Microsoft MSFT posted a gargantuan $176 billion in revenue over the last 12 months, which ended in September, a 20% increase. The company's profits were an astounding $68 billion, up 39%. As a tech reporter, Dan Howley explains, Microsoft mints cash from its dominant software and gaming businesses while thriving in new areas such as cloud computing, networking apps and social media.
Microsoft is 46 years old and posting gains more typical of a startup, so Microsoft's stock has gone up by 45% this year, more than the return of the S&P 500 and the tech-heavy Nasdaq index IXIC. We don't know what Microsoft's stock will do next year, but we do know it s impressive when a stalwart in any industry can reinvent itself and repeatedly sniff out the direction of the future.
The stock recommendation is not based on Microsoft's company of the year 2021, according to our annual best company picks. Financial performance is considered when evaluating hundreds of companies each year, but we also consider qualitative factors such as leadership, cultural relevance and longevity. We look back each year to see how our previous picks performed afterward. Our record is solid but not perfect.
Our picks have outperformed the S&P 500 by nearly 10% during the first year after we designated them as the Company of the Year. Our 2018 pick was underperformed the following year, 2019 at Square SQ. In 2020 it went on a tear due to the rapid adoption of its Cash App mobile payment service and a move intobitcoin, two new business lines we highlighted in our 2018 profile. Square's stock rose a modest 12% in 2019, but it soared by 248% in 2020.
We saw that Zoom shares could drop as we prepared our 2020 profile of the company. It was obvious that the trade would fade as vaccines were rolled out and the epidemic receded. In October 2020, Zoom shares were down about 25% from that high when we locked it in as our best company choice for 2020. That was okay, it didn't diminish an extraordinary story.
No matter how strong its financial performance, Facebook FB now called Meta our 2015 winner, probably couldn't make the cut today. Facebook seems unable to purge from its platform because of the fetid disinformation it seems to be too controversial and a pariah to some. It seems too competitive — if there can be such a thing — in its effort to snag the attention of teenagers and children before anybody else. In 2015, those issues weren't on our radar.
In last year's profile of Zoom, we speculated that a larger company might want to buy it at some point. That didn't happen in 2020, perhaps because Zoom, with a market value of $54 billion, is still pricey. If there is a deal, Microsoft could be the buyer. That would be the marriage of two Yahoo Finance Companies of the Year.
Rick Newman is the author of four books, including Rebounders: How Winners Pivot from Setback to Success. You can also send confidential tips.