Deepwater Asset Management’s Gene Munster is highlighting the inception of a multi-year bull market spearheaded by AI, with the potential for the Nasdaq to double or triple its present figures.
What’s Happening: The Nasdaq Composite surged roughly 43% in 2023 and has launched into 2024 with striking momentum. The Nasdaq 100, monitored by the Invesco QQQ Trust (QQQ), skyrocketed over 50% last year, propelled by heightened AI adoption and a focus on bolstering efficiency driving the surge of major tech stocks.
Munster anticipates the AI-driven rally in the Nasdaq is merely in its infancy. In a recent statement, he proposed that the Nasdaq could potentially reach heights of 45,000 in as little as two years.
“We frequently discuss the negative implications of inflation, but there exists a tremendous upside tied to AI,” Munster declared during an appearance on CNBC’s “Squawk Box.”
In order to grasp the enormity of the paradigm shift transpiring, investors should evaluate AI on a spectrum, Munster advised. He rated the impact of the personal computer revolution at 20 out of 100 in terms of significance, followed by the mobile phone at 25, the internet at 50, electricity at 100, and AI at an astounding 99.
“It would have been a perfect 100 if not for the requirement of electricity to power AI,” remarked the tech analyst.
Given this perspective, Munster sees no cause for concern regarding the near-term trajectory of inflation. He proclaimed, “If this shift is as massive as I believe, or even half as substantial, we could witness a significant surge in the Nasdaq: a two-fold increase over the next two to three years.”
Take Note: Meta, Apple – The Unsung Heroes in the AI Arena? Gene Munster Envisions a Dramatic Shift
When CNBC pressed for clarification on his audacious forecast, Munster explained his conviction that the market is at the outset of a three- to five-year bull run, ultimately culminating in a bubble. During the dot-com bubble, the Nasdaq peaked at 100 times earnings. At present, the QQQs are trading at roughly 28 times earnings, Munster explained.
“Whether it’s a twofold or threefold surge, I can’t predict the exact figure, but I am certain that AI will be transformative and propel the market to greater heights,” Munster concluded.
QQQ Price Action: At the time of publication on Wednesday, the Invesco QQQ Trust had advanced by 0.71% to $431.60, as reported by Benzinga Pro.
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