History Says the Nasdaq Will Soar in 2025. Here's the 1 AI Stock to Buy Before It Does.

The Nasdaq Composite Index, a broad-based tech-centric index tracking the performance of over 3,000 stocks listed on the Nasdaq exchange, has a history of strong performance leading up to significant surges. In the late 1990s, the index surged 100% in just over two years, and in the early 2000s, it surged another 100% in just under three years. More recently, the index surged 80% in the two years leading up to the 2017 peak. This suggests that the Nasdaq Composite Index has the potential to surge significantly in the coming years.

Technological advancements and innovation have significantly contributed to the Nasdaq's historical performance. The Nasdaq, being heavily tech-centric, benefits from the growth and success of tech companies. As tech innovations drive economic growth, the Nasdaq tends to rise. For instance, the dot-com boom in the late 1990s and the recent tech surge, fueled by AI and cloud computing, have both lifted the Nasdaq. In 2025, as AI continues to revolutionize industries, expect the Nasdaq to soar.



The Nasdaq's outperformance or underperformance relative to other major indices can be attributed to several factors. One key factor is the composition of the Nasdaq, which is heavily weighted towards technology stocks. This sector has been a significant driver of growth in recent years, particularly during the pandemic, as companies have benefited from increased demand for digital services. Additionally, the Nasdaq's exposure to growth stocks, which tend to have higher valuations and greater volatility, can contribute to its outperformance during bullish market conditions. However, during periods of market stress or economic uncertainty, the Nasdaq's growth-oriented composition can lead to underperformance relative to more defensive indices.



The Nasdaq's sector composition and weighting have significantly influenced its performance compared to other indices. As a tech-heavy index, the Nasdaq has benefited from the growth of the tech sector, particularly during the pandemic. However, this concentration also exposes it to sector-specific risks. In contrast, the S&P 500, with its broader sector exposure, has shown more stable performance. The Nasdaq's weighting scheme, which favors larger-cap stocks, has also contributed to its performance, as these companies tend to have more established business models and lower risk profiles.



AppLovin (NASDAQ: APP) is the most recent addition to the Nasdaq-100, joining the benchmark on Nov. 18, replacing discount retailer Dollar Tree. Since early last year, the stock has surged 3,250% (as of this writing) as the company harnessed artificial intelligence (AI) to inform its in-app gaming advertising. Despite that impressive run-up, many on Wall Street think there's still a long runway ahead. Below, I'll review the secret to AppLovin's success and what lies ahead.

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AI-powered algorithms AppLovin went public in early 2021 with the mission to help app developers succeed. The company developed a comprehensive set of tools dubbed AXON -- powered by artificial intelligence -- that help businesses get their apps noticed in an otherwise crowded marketplace, while automating and optimizing their in-app gaming advertising. With a great growth story and this AI megatrend behind it, the stock has soared.



AI informs AppLovin's in-app gaming advertising, helping businesses get their apps noticed in an otherwise crowded marketplace. The company's AXON tools automate and optimize advertising, driving impressive growth. As AI continues to revolutionize industries, expect the Nasdaq to soar in 2025.



In conclusion, the Nasdaq Composite Index has a history of strong performance leading up to significant surges, and technological advancements and innovation have significantly contributed to its historical performance. As AI continues to revolutionize industries, expect the Nasdaq to soar in 2025. AppLovin (NASDAQ: APP) is one AI stock to consider before the Nasdaq surges, as it has harnessed AI to inform its in-app gaming advertising and driven impressive growth. Keep an eye on this stock as the tech sector continues to innovate and grow.