History Suggests The Nasdaq Will Soar In 2024 2 Artificial

Bonisiwe Shabane

-Dec 3, 2025, 12:06 AM

history suggests the nasdaq will soar in 2024 2 artificial

The demand for AI is accelerating, and these two companies stand at the intersection of profits. After a year of spectacular gains, the stock market seems to be taking a breather to kick off the new year. Investors are justifiably cautious after the Nasdaq Composite (^IXIC +0.34%) notched gains of 43% last year. Given those stellar gains, investors are left to wonder if the current rally still has legs -- and history can help provide some guidance. Going back to 1972 -- the first full year the tech-centric index traded -- in every year following a bear market rebound, the Nasdaq has rallied another 19%, on average. The results varied by year, of course, ranging from a 7% increase in 1986 to a 38% surge in 2013.

That said, and given the ongoing economic recovery, chances are good that the current market rally will continue in 2024. There's evidence that suggests it was the emergence of generative AI that fueled the market surge last year. These advanced algorithms were deployed to handle menial tasks, freeing the user for higher-level chores. While it's still early innings for AI, there are a couple of companies that stand out from the pack and are well-positioned to profit from the AI revolution. Microsoft (MSFT +0.92%) is arguably a household name, best known for its pervasive Windows PC operating system and Office suite of productivity tools. Written by Dani Cook for The Motley Fool->

Investing in stocks can be tricky, as the market's past performance isn't always indicative of what's to come. However, knowledge is power, and noticing past trends and patterns can help ensure you're ready to strike if history decides to repeat itself. As a result, it can only help investors to know that history suggests the Nasdaq Composite could surge in 2024. Since the index launched in 1971, it has risen by an average of 19% in each year that followed a market recovery of the magnitude you saw in 2023. Consequently, it's not a bad idea to consider investing in the companies fueling the bulk of the Nasdaq Composite's growth. A boom in the artificial intelligence (AI) space last year was instrumental in driving the market's recovery and will likely continue to propel big gains in 2024.

Nvidia (NASDAQ: NVDA) and Microsoft (NASDAQ: MSFT) are two attractive options for investors looking to profit from the rise of the AI industry. Even the most casual of investors is probably aware of Nvidia's meteoric rise last year. Its stock soared by 239% in 2023 as its graphics processing units (GPUs) became the gold standard for hardware for AI developers worldwide. These high-powered parallel-processing chips are crucial for training and powering AI models. The Nasdaq Composite entered a new bull market earlier this year; since 1990, the index has returned an average 281% during bull markets. Nvidia GPUs and networking are the gold standard in artificial intelligence infrastructure, and many analysts expect the company to maintain its dominance for years to come.

Zscaler is benefiting from artificial intelligence both because the technology is empowering cybercriminals and because it has created a new category of IT assets that require protection. The Nasdaq Composite (NASDAQINDEX: ^IXIC) 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 (NASDAQ: NVDA) and Zscaler (NASDAQ: ZS) as undervalued, as detailed below.

After a year of spectacular gains, the stock market seems to be taking a breather to kick off the new year. Investors are justifiably cautious after the Nasdaq Composite (NASDAQINDEX: ^IXIC) notched gains of 43% last year. Given those stellar gains, investors are left to wonder if the current rally still has legs — and history can help provide some guidance. Going back to 1972 — the first full year the tech-centric index traded — in every year following a bear market rebound, the Nasdaq has rallied another 19%, on average. The results varied by year, of course, ranging from a 7% increase in 1986 to a 38% surge in 2013. That said, and given the ongoing economic recovery, chances are good that the current market rally will continue in 2024.

There’s evidence that suggests it was the emergence of generative AI that fueled the market surge last year. These advanced algorithms were deployed to handle menial tasks, freeing the user for higher-level chores. While it’s still early innings for AI, there are a couple of companies that stand out from the pack and are well-positioned to profit from the AI revolution. Microsoft (NASDAQ: MSFT) is arguably a household name, best known for its pervasive Windows PC operating system and Office suite of productivity tools. Seeing the vast potential for generative AI, Microsoft dove in headfirst, taking a $13 billion stake in ChatGPT creator OpenAI. More importantly, the company quickly developed Copilot, an AI-powered assistant designed to make its software users more productive by streamlining repetitive, time-consuming tasks.

These investor-favorite companies faced economic challenges last year, but the dark skies appear to have lifted. What a difference a year makes. After a 2022 when the U.S. suffered through decades-high inflation and the worst stock market performance since 2008, Wall Street staged a heady rebound last year. On the heels of its 35% decline in 2022, the Nasdaq Composite found its footing and gained 43% in 2023. Students of economic history will know that the rally is likely to continue in 2024.

Going back as far as 1972 -- the first full year that the tech-focused index existed -- in every year following a bear market rebound, the Nasdaq has returned 19%, on average. That pattern suggests that the current rally should still have legs. As in life, there are no guarantees in investing, but stock aficionados would do well to pay attention to the lessons of history. Furthermore, there's an argument that last year's rally was sparked by the recent advances in artificial intelligence (AI). It's still early days for generative AI, and companies are scrambling to determine how best to deploy these ground-breaking algorithms. One thing's for sure: Two companies with long histories of integrating AI into their operations are well-situated to profit.

Let's look at both. Amazon (AMZN +0.76%) is one of the most recognizable companies in the world, with business interests that stretch across a broad cross-section of both the consumer and commercial markets. A large contributor to Amazon's success has been the company's integration of AI into two business areas where it's the industry leader and a third where it's a major contender. The combination of its businesses in e-commerce, cloud computing, and digital advertising gives Amazon reach that's hard to rival. The Nasdaq Composite (NASDAQINDEX: ^IXIC) 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 (NASDAQ: NVDA) and (NASDAQ: ZS) as undervalued, as detailed below. Here's what investors should know about these artificial intelligence stocks. © All rights reserved. Stock prices are provided by BSB-Software

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History Suggests The Nasdaq Will Soar In 2024 2 Artificial

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