THE Nasdaq-100 The index is up 10% so far in 2024, and this is not surprising since it has benefited from the solid growth reported by its main constituents, which are benefiting from the growing demand for artificial intelligence (AI ) and cloud computing.
The good news is that the Nasdaq-100 could continue to rise as the year goes on. German Bank estimates that the index could rise 19% in 2024 due to slowing inflation and solid economic growth in the United States. At the same time, the proliferation of AI is expected to remain one of the key drivers of growth. technology stocks in 2024, and it could play a central role in boosting the Nasdaq-100.
Let’s take a closer look at two components of the Nasdaq-100: Nvidia (NASDAQ:NVDA) And Qualcomm (NASDAQ:QCOM) – which deliver exceptional results through the adoption of AI. We’ll see why it makes sense to buy these two AI stocks before the Nasdaq posts more gains.
1.Nvidia
Nvidia’s stunning 121% gains in 2024 played a central role in the Nasdaq-100’s rise. And the stock’s exceptional rally appears to be here to stay. Analysts have raised their earnings expectations for the chipmaker following its latest quarterly report.
Over the past 30 days, 47 analysts have increased their earnings per share (EPS) estimate for fiscal 2025, while 44 have done the same for fiscal 2026. Improving Expectations for Nvidia’s EPS is reflected in the following graph.
Analysts expect Nvidia to generate stronger earnings for two reasons. First, the company has managed to maintain its hold on the AI chip market. It ended 2023 with a 94% share of the AI server market. As a result, its revenue from the sale of data center chips jumped 427% year over year in the first quarter of fiscal 2025 (which ended April 28) to a record $22.6 billion.
Nvidia’s peers such as AMD And Intel reported data center revenue of $2.3 billion and $3 billion, respectively, in the first quarter of 2024. More importantly, Nvidia can maintain its dominance in the AI chip market with the arrival of a new generation of chips which could widen the technological gap he enjoys his rivals. Its upcoming chips based on the Blackwell architecture would be four times faster than current chips based on the Hopper architecture.
Nvidia points out that demand for its Blackwell chips is so strong that it will struggle to meet it by 2025. The company’s lead in AI therefore appears to remain there, and this should allow it to ship more units of its AI graphics cards.
The second reason analysts are optimistic about Nvidia’s bottom line growth is its immense pricing power in AI chips. According to Raymond James, manufacturing a Blackwell B200 accelerator could cost Nvidia $6,000. Since each processor is expected to sell for between $30,000 and $40,000, it stands to make a considerable profit on its new chips.
Overall, the long-term growth of the AI chip market is going to be a big…
