THE Nasdaq has exploded 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 due to artificial intelligence (AI) boom, as five of the benchmark index’s most heavily weighted stocks and several others in the top 10 operate in this high-growth area. The current AI market, estimated at $200 billion, is expected to reach more than $1 trillion by the end of the decade, meaning companies that got involved in the technology early could benefit greatly in the years to come.
Why is everyone excited about AI? Because it could revolutionize the way many things are done, saving businesses time and money – and that’s great news for profit growth. This alone could give us optimism about the path the Nasdaq takes next year.
But history also offers us reasons to believe in a new victory for the Nasdaq. Since 1990, five out of six rising periods have resulted in the index rising for more than two consecutive years. So the Nasdaq has generally had three or more years of gains lately.
Get fintech insights, deals, and updates before everyone else
Join 1,000+ fintech professionals
Of course, there’s no guarantee that this will happen – clues and actions may surprise us – but if it does happen, you’ll need to be prepared. And the best way to prepare is to buy a particular stock before the Nasdaq soars again. Let’s find out which one.
This player is a member of Nasdaq, the S&P500and, more recently, he joined the Dow Jones Industrial Average. It has grown by more than 2,400% over the past five years. But don’t worry. Thanks to its dominance in the AI market and something big happening right now, it still has plenty of room to run. And that’s why it’s still a great buy today, one that could send the Nasdaq even higher next year.
I’m talking about Nvidia (NASDAQ: NVDA), the seller of the world’s most powerful graphics processing units (GPUs). These chips are key elements in many crucial AI tasks, such as model training and inference. Customers have recognized Nvidia’s strength in this area, and as a result, they have been willing to wait for shipments of these high-end products and pay more than they would for competing AI chips. Actually, Oracle co-founder Larry Ellison even said recently that he and Tesla the leader Elon Musk in fact begged the head of NvidiaJensen Huang, for more GPUs.
So the world’s largest companies – those with the resources to invest heavily in AI – see the value in choosing Nvidia over the competition. This and Nvidia’s commitment to updating its GPUs on an annual basis should allow it to remain at the forefront in this rapidly evolving sector.