Nasdaq’s Record-Setting Climb
The Nasdaq Composite performed exuberantly in 2023, enjoying a meteoric 43% gain, and has continued to soar in 2024. Fueled by a surge in AI adoption and increased emphasis on efficiency, the index surged more than 50% last year, prominently exemplified by the exceptional performance of the Invesco QQQ Trust.
Bright Forecast for the Nasdaq
Gene Munster of Deepwater Asset Management has turned heads with his ardently optimistic outlook, suggesting that the Nasdaq could potentially double or triple from its current levels. Specifically, Munster alluded to the possibility of the Nasdaq reaching as high as 45000 in just two years.
AI: A Transformative Force
Munster expounded on the paragon shift underway, likening it to historical technological revolutions. Placing AI at the cusp of revolutionary magnitude, he ranked the personal computer revolution at 20 out of 100, the mobile phone at 25, the internet at 50, electricity at 100, and AI just shy of that at 99. He also emphasized the necessity of electricity to power AI, indicating a transformative and pervasive force in the market.
Riding the AI Wave
In Munster’s view, the looming specter of inflation pales in comparison to the seismic impact of AI. He foresees a three- to five-year bull market that may culminate in a discernible bubble. Drawing parallels to the dot-com era, where the Nasdaq reached a peak of 100 times earnings, Munster reflected on the current earnings multiple of the QQQs, which stands at around 28 times earnings. Additionally, he avowed that AI’s transformative power will be a key driver propelling the market higher, potentially paving the way for a substantial uptick.
AI’s Market Potential
Articulating the potential market dynamics, Munster envisions an influx of capital to fortify AI, underscoring the prospective emergence of a market bubble. In light of the transformative force of AI, Munster speculated that the market could witness an unprecedented surge, with AI serving as the primary impetus for this projected exponential growth.
Implications for Invesco QQQ Trust
The Invesco QQQ Trust’s price action lends credence to Munster’s bullish sentiment, with the trust witnessing a 0.71% surge to reach $431.60 at the time of publication on Wednesday. These indicators hint at the market’s growing anticipation and the substantial potential for AI-driven growth, exemplified by the remarkable performance of the QQQ.
This illustration was generated using artificial intelligence via MidJourney.