History says the Nasdaq will rise in 2025. My Top 3 AI Stocks to Buy Before That Happens.
Last year was fantastic for the markets in general, but the index that really stood out was Nasdaq. It climbed 28%, while S&P 500 increased by 23% and Dow Jones Industrial Average increased by 12%. The Nasdaq, which is heavily weighted in technology companies, rose as investors piled into the industry’s hottest new area: artificial intelligence (AI) stocks.
Today’s $200 billion artificial intelligence market is projected to surpass $1 trillion by the end of the decade, and investors have sought to get in early on this high-growth story. The technology has the potential to transform many industries, saving companies time and money, while increasing profits as a result. And earnings growth often leads to positive stock results.
As 2025 begins, it makes sense to ask this question: After two years of growth, will the Nasdaq maintain its momentum this year? History says it will. If we look at past periods of growth since 1990, in five out of six cases the Nasdaq has risen for three consecutive years or more.
Of course, the market can surprise us and deviate from the trend, but in general, history has proven to be a solid guide. Now let’s take a look at my top AI stocks to buy before the Nasdaq takes off.
You can team up Meta platform (NASDAQ: META) mostly with social networks. The company owns Facebook, Messenger, Instagram and WhatsApp — which together have more than 3.2 billion users each
day.
But Meta is also becoming a giant in artificial intelligence, developing its own a large language model (LLM) to support tools we can all use, like the Meta AI Assistant. The company made artificial intelligence its biggest investment area last year and recently talked about plans to continue increasing spending in this area. It aims to create artificial intelligence that can help all its users with their daily tasks, work-related projects and more.
This focus and related investment could eventually make Meta a leader in this hot growth area and also increase its revenue. For example, the company generates most of its revenue from advertising — and AI assistants can encourage us to spend more time on Meta’s apps, encouraging advertisers to spend more to get us there.
Taking all of this into account, Meta Stock — trades at just 24 times estimates of future earnings even after last year’s 65% gain — looks like a bargain AI buy to grab before the Nasdaq spikes.
Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL)like Meta, it might not be a company you automatically associate with artificial intelligence. You probably know it best for Google search, a tool that many of us use every day.
But it wins in AI in two ways. First, his LLM Gemini helps improve search and make the experience better for those who advertise on Google. And second, Alphabet offers AI tools and services, including Gemini, through Google Cloud, its cloud computing business.
