Even if an ASX investor hasn't invested in any of America's Nasdaq tech stock giants themselves, they have probably heard of the success of these stocks over the past year, or even in just 2024 to date.
The likes of Apple, Amazon, Google-owner Alphabet, and Tesla, all stocks that are found on the tech-heavy Nasdaq stock exchange, have been so famous over the past few years that they are now effectively shorthand for 'hands-down winner'.
But even the stunning gains that these stocks and their peers in the 'Magnificent Seven', which includes Microsoft, Meta Platforms, and NVIDIA, have enjoyed in the past couldn't have prepared investors for what's been in store most recently.
Six out of these seven Nasdaq stocks have enjoyed another year of phenomenal gains over 2024, with Tesla being the odd one out.
Apple stock has gained a cool 26% or so, a similarly healthy uptick to that enjoyed by Amazon and Alphabet.
But it's been Meta and Nvidia that have really shot the lights out. Meta, a Nasdaq stock that isn't exactly the new kid on the block anymore, is up almost 70% year to date. But Nvidia's ascension makes even that rise look paltry.
This year alone, the semiconductor giant has exploded more than 173% higher. Since just the start of 2023, investors have banked more than 800%. Check it out for yourself below:
Image source: Getty Images
Is it too late to buy the big Nasdaq stocks in 2024?
Many investors, ASX or otherwise, might be watching these kinds of gains and feeling a little forlorn. After all, many ASX investors don't like to invest outside the Australian markets directly, even if their superannuation is probably benefitting from the recent rise of Nvidia, Meta and the other big Nasdaq tech stocks.
So is it too late to buy Nvidia, Amazon, Meta or the others?
Well, one ASX expert fortunately doesn't think so. As reported by the ABC this week, James Reilly of Capital Economics reckons there's potentially plenty of steam left in the American tech giants.
Reilly does point out that a big part of the recent gains we have been seeing is being driven by investor excitement and "enthusiasm" driving up the earnings multiples of these seven Nasdaq stocks.
However, he also points out that these companies are still growing their earnings at a healthy rate, and investors might just continue to be happy to reward them for it:
In short, we think that [continued Nasdaq stock price growth] depends largely on investors' enthusiasm for AI growing. Such enthusiasm propelled stocks higher in Q2 but took a back seat in Q3, with other parts of the market doing the heavy lifting.
But enthusiasm appears to be returning, with the Philadelphia Semiconductor Index back around a 2-month high and NVIDIA closing at its all-time high yesterday.
Our base case of a soft landing for the US economy and aggressive Fed rate cuts is one which would accommodate AI hype, steady earnings growth, and a further compression of US equity risk premia to around dotcom-bubble levels.
So, if the hype over artificial intelligence (AI) holds and these companies' earnings continue to grow, this expert seems to think higher share prices are likely.
As always, we'll have to see if this turns out to be the case. But this is certainly something for ASX investors to keep in mind when considering an investment in any of the major Nasdaq tech stocks this year and beyond.
