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Nasdaq’s AI Prognostication: Potential Doubling or Tripling in 2 Years Nasdaq’s AI Prognostication: Potential Doubling or Tripling in 2 Years

Nasdaq’s Bright Future

Deepwater Asset Management’s Gene Munster has stirred up a whirlwind of speculation with his optimistic outlook for the Nasdaq Composite. According to Munster, we are standing on the cusp of a multi-year bull run driven by AI, which could result in the Nasdaq doubling or tripling from its current levels.

Nasdaq’s Recent Performance

History The Nasdaq Composite surged by approximately 43% in 2023 and has already demonstrated a robust start in 2024. The Nasdaq 100, monitored by the Invesco QQQ Trust (QQQ), soared by over 50% last year, fueled by the expanded adoption of AI and a heightened emphasis on efficiency that propelled several leading tech stocks.

AI’s Transformative Potential

Munster isn’t just bullish – he is exhilarated about the potential of AI to steer the Nasdaq to dizzying heights. On a recent segment of CNBC’s “Squawk Box,” Munster postulated that the Nasdaq could surge to as high as 45000 in a mere two years, fueled by the momentum of the AI-powered rally.

AI Paradigm Shift

Munster emboldened investors to comprehend the seismic magnitude of AI’s impact by contextualizing it on a historical spectrum. He equated past technological revolutions, ranking the personal computer at 20, the mobile phone at 25, the internet at 50, and electricity at 100. According to Munster, AI sits at an astonishing 99 out of 100, with the only decelerant being the necessity for electricity to power AI.

AI’s Potential Bubble

Further expounding on his forecast, Munster elaborated on the impending three- to five-year bull market, forewarning of an eventual bubble. Drawing parallels with the dot-com bubble, where the Nasdaq peaked at 100 times earnings, Munster noted that the QQQs are currently trading around 28 times earnings. Amidst his musings, he hinted at the potential for a capital rush to fuel the AI revolution, paving the way for an emergent market bubble.

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Pricing Indicators

At the time of Wednesday’s publication, the Invesco QQQ Trust was up 0.71% at $431.60, signaling a growing belief in the potential for AI to propel tech stocks to new heights.

This illustration was generated using artificial intelligence via MidJourney.