Stock Market Predictions 2024: Tech Stocks on the Rise: Experts Predict Bull Market in 2024
Nov 24, 2023
Here are the new stock market predictions 2024, As the year comes to a close, tech stocks are showing no signs of slowing down. The Nasdaq Composite has already seen a remarkable 36% increase this year, and experts predict that the sector will continue its upward trajectory in both the short run and as we look ahead to 2024.
The current state of the tech industry can be traced back to the tumultuous year that was 2022. The index experienced a harsh decline of 33%, with losses piling up due to tightened monetary policy and diminished funding sources. In addition, the lingering effects of the Covid-19 pandemic caused supply chain disruptions and altered IT purchasing patterns.
However, conditions began to shift as we entered 2023. The market changed its perception of the Federal Reserve’s stance on interest rates, with many experts predicting a flattening or even lowering of rates in the near future. In addition, there was a noticeable improvement in the availability of key components, providing a more supportive environment for tech companies.
One major player in this year’s tech surge is OpenAI, which celebrates the one-year anniversary of its AI chatbot ChatGPT on November 30th. This groundbreaking technology has sparked a wave of investment in artificial intelligence from both consumer and enterprise markets as companies seek to leverage its capabilities.
With the increasing recognition that competing in this field requires significant financial resources, investors have flocked to the sector’s biggest names – including Apple (AAPL), Microsoft (MSFT), Alphabet (GOOGL), Amazon.com (AMZN), Nvidia (NVDA), Meta Platforms (META), and Tesla (TSLA). On average, these stocks have seen a staggering 107% increase this year alone. In comparison, the S&P 500 has only gained 3% on an equally weighted basis.
This rally has attracted the attention of many analysts and experts, with some predicting that we are on the cusp of a new tech bull market. Dan Ives, an analyst at Wedbush Securities, predicts that this rally will last for 18 to 24 months and be fueled by record levels of cash reserves currently held by institutional investors. He also believes that Street analysts have been too conservative in their projections and that we could see even more impressive growth than expected.
“There are trillions of dollars on the sidelines,” he says. “Institutions are bearish, but there’s a soft landing on the horizon, with the Fed set to cut rates next year. The spending environment for digital advertising and IT infrastructure is robust and upticking.”
In particular, Ives is bullish on the impact of AI on both hardware and software spending, noting that this will extend beyond just the already dominant tech companies.
While investors may be concerned about potential risks or overvaluation in the market, there are still many opportunities to capitalise on the growth of tech. Analysts point to the potential of Apple and Microsoft, with both companies projected to reach $4 trillion market caps by 2024. This is on top of their already impressive positions as two of the world’s largest companies by market value.
Apple, which has reported four consecutive quarters of negative revenue growth, is expected to rebound through iPhone sales and the launch of the “AI App Store” in 2024. This new venture will focus on generative AI apps that can run on iPhones.
Erika Klauer, a portfolio manager with Jennison Associates, also thinks conditions are shaping up for a strong 2024—and she’s as bullish as Ives about AI. “There’s still a long runway for growth,” she says.
Klauer says that Microsoft’s aggressive approach to pricing its Copilot software for its 365 office suite could make them the “poster child” for monetising AI enterprise software. However, she also notes that other companies like Adobe, ServiceNow, and Salesforce are not far behind and could also drive the sector with their increased prices for AI versions of their software.
Jonathan Curtis, portfolio manager at Franklin Technology fund and chief investment officer at the firm, believes that investors still do not fully appreciate what is to come from generative AI.
While his fund’s biggest positions are in companies like Nvidia, Microsoft, Amazon, and Apple, he also sees potential for growth further down the AI food chain. Specific examples include chip manufacturer Taiwan Semiconductor (TSM), chip-design software companies Synopsys (SNPS) and Cadence Design Systems (CDNS), semiconductor equipment players Applied Materials (AMAT) and ASML (ASML), and chip stocks like Advanced Micro Devices (AMD) and Marvell Technology (MRVL).So, the overall outlook for tech stocks remains overwhelmingly positive as we look towards stock market predictions 2024 and beyond. While there may be some bumps along the way, it is clear that the market has shifted to a more favourable state for tech companies and their investors.