University of Kwazulu-Natal

History Says The Nasdaq Will Soar In 2025 1 Artificial Intelligence

Bonisiwe Shabane
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history says the nasdaq will soar in 2025 1 artificial intelligence

Historical trends suggest that 2025 should be another great year for the Nasdaq. Since ChatGPT was released on Nov. 30, 2022, the S&P 500 (^GSPC +0.08%) and Nasdaq Composite (^IXIC +0.37%) have boasted total returns of 48% and 69%, respectively. Euphoria around the prospects of artificial intelligence (AI) helped snap the capital markets out of a wicked funk that took place during much of 2022. And while some investors may be wary of just how long the bull market will last, history suggests 2025 should be another terrific year for technology stocks in particular. Below, I'll make the case for why this year could feature another strong performance by the Nasdaq.

Moreover, I'll outline why AI infrastructure stock Nebius Group (NBIS 0.54%) looks well positioned for some solid gains. Since the Nasdaq's inception in 1971, the index has generated negative annual returns a total of 14 times. During this period, the Nasdaq has only declined across consecutive years on two occasions: between 1973 and 1974 and from 2000 to 2002. Written by Adria Cimino for The Motley Fool-> The Nasdaq has blasted higher over the past two years, gaining more than 43% last year and now heading for an increase of more than 33% for 2024. This is thanks to the artificial intelligence (AI) boom, as five of the benchmark's most heavily weighted stocks and several others in the top 10 operate in this high-growth area.

Today's $200 billion AI market is forecast to reach more than $1 trillion by the end of the decade, meaning companies that got involved in this technology early could greatly benefit in the years... Why is everyone excited about AI? Because it could revolutionize the way many things are done, saving companies time and money -- and that's great news for earnings growth. This alone could offer us optimism about the path the Nasdaq will take next year. But history also offers us reason to believe in another Nasdaq win. Since 1990, five out of six periods of gains have involved the index rising for more than two consecutive years.

So, the Nasdaq has generally posted three or more years of gains in recent times. Of course, there's no guarantee this will happen -- indexes and stocks can surprise us -- but if it does, you'll want to be prepared. And the best way to prepare is to buy one particular stock before the Nasdaq soars once again. Let's find out which one. The current Nasdaq bull market is young by historical standards, and Wall Street analysts see buying opportunities in Nvidia and Zscaler. The Nasdaq Composite (^IXIC +0.77%) entered a new bull market on April 8.

The technology-heavy index has since advanced by 53%, but history suggests more upside is likely over the next year. Since 1990, the Nasdaq has returned an average of 281% during bull markets, compounding at 31% annually. How can investors capitalize? Most Wall Street analysts view Nvidia (NVDA +2.57%) and Zscaler (ZS +0.19%) as undervalued, as detailed below. Here's what investors should know about these artificial intelligence stocks. Semiconductor company Nvidia reported excellent financial results in the third quarter.

Revenue soared 62% to $57 billion, driven by solid growth across all four segments: data center, gaming, professional visualization, and automotive/robotics. Meanwhile, non-GAAP net income climbed 60% to $1.30 per diluted share. Daily stocks & crypto headlines, free to your inbox By continuing, I agree to the Market Data Terms of Service and Privacy Statement Written by Trevor Jennewine for The Motley Fool-> The Nasdaq Composite (NASDAQINDEX: ^IXIC) has advanced 34% year to date, and history says that momentum may carry into 2025.

Since its inception in 1971, the Nasdaq has returned at least 20% in 20 years, and at least 30% in 12 years. After those performances, the index typically generated strong returns in the next 12 months, as detailed below: In short, if the Nasdaq returns at least 30% this year, history says the index will add another 19% next year if its performance aligns precisely with the average. Of course, past results never guarantee future performance. But there is no in harm leaning into trends, so long as the goal is long-term capital appreciation. Start Your Mornings Smarter!

Wake up with Breakfast news in your inbox every market day. Sign Up For Free » With that in mind, Broadcom (NASDAQ: AVGO) completed a 10-for-1 stock split in 2024 after substantial share price appreciation, but 85% of Wall Street analysts that follow the company still rate the stock a...

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