Why the Nasdaq Composite is Poised for Continued Growth and the Stock-Split Stock Worth Buying Now
The Nasdaq Composite has experienced astonishing growth over the past few years, largely fueled by the surge in artificial intelligence (AI), improving economic indicators, a stable political climate post-election, and reductions in interest rates by the Federal Reserve. After boasting a remarkable 43% return in 2023, the tech-heavy index continues its upward trajectory with an approximate 30% gain in 2024. Historical trends suggest that this rally might be just the beginning, leading into an even more promising 2025.
The Current Bull Market
Starting on October 12, 2022, the current bull market has already entered its third year. Statistically, these cycles last anywhere from five to ten years, which bodes well for the Nasdaq’s potential to sustain momentum into next year. Remarkably, the Nasdaq has delivered gains 73% of the time over the past 53 years. If history is any guide, one can expect an additional average gain of 12% in the years following positive earnings—a strong signal for investors looking to capitalize on this bullish sentiment.
The Phenomenon of Stock Splits
In addition to the excitement surrounding the Nasdaq, there is a renewed interest in stock splits. This trend should not be overlooked; historically, companies that undergo stock splits see robust sales and profit increases. One standout example is Nvidia (NASDAQ: NVDA), a tech giant that has skyrocketed 26,920% in the last decade alone, prompting a 10-for-1 stock split earlier this year following a 4-for-1 split in 2021.
Despite the stock’s recent impressive performance, analysts believe Nvidia’s growth phase is far from over. What makes Nvidia particularly special is its unique position at the intersection of technological innovation and stock market dynamics.
The Generative AI Boom and Nvidia’s Central Role
The rampant adoption of generative AI—set to streamline operations across a multitude of industries—has become a game-changer for many companies. Nvidia, renowned for its graphics processing units (GPUs), is a key player here. These chips allow for efficient processing of AI algorithms, fundamentally altering how data is handled and solutions are generated across platforms.
The market is awash with applications driven by AI, from crafting emails to coding. As companies increasingly turn towards these advanced algorithms, the need for robust processing systems continues to skyrocket, enhancing Nvidia’s already lucrative data center operations.
Dominance in the Data Center Market
Nvidia has carved out a remarkable niche, controlling up to 98% of the data center GPU market, according to TechInsights. This dominant position places Nvidia at the forefront of the AI revolution, enabling the company to not only capitalize on current demand but also set the stage for future growth.
Recent financials have been nothing short of stellar. For the fiscal third quarter ending October 27, Nvidia reported an astonishing $35.1 billion in revenue, marking a 94% year-over-year increase. Notably, their data center segment accounted for $30.8 billion of this, reflecting tremendous year-over-year growth of 112%.
Wall Street’s Optimistic Outlook
Looking ahead, Wall Street’s projections are bullish. For fiscal 2026, consensus estimates suggest revenue could reach $195 billion, representing a 51% annual increase. However, some analysts envision figures surpassing $269 billion, indicating over 100% growth. Historically, Wall Street has been cautious in its estimates for Nvidia, often underestimating the company’s actual performance.
Moreover, Nvidia plans to launch its next-generation Blackwell platform soon, which analysts believe will outpace its previous architectures in both demand and capability. As Bank of America’s analyst, Vivek Arya, explains, Nvidia’s future is not merely as a hardware manufacturer—it’s morphing into a comprehensive system integrator capable of providing complete solutions.
An Attractive Investment Opportunity
Despite the stellar growth—183% gains in 2023—Nvidia’s valuation remains relatively fair. Current projections estimate earnings per share (EPS) of $4.42 for 2026, implying the stock is priced at about 32 times forward earnings. When considering the expansive market opportunities, this makes for an appealing entry point for investors.
If you’re contemplating where to place your bets as we head into 2025, Nvidia stands out as a stock-split stock to watch. It not only embodies the dynamism of today’s tech landscape but also exemplifies the potential for years of growth ahead.
Conclusion: Stay Educated, Stay Ahead
As you consider your investment options, remember that Nvidia is not just a name to watch—it’s a company that could reshape the future of technology. Monitor the market, stay updated with Extreme Investor Network, and always consider how historical trends and current data intersect to inform your investment strategies.
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