Wall Street faces uncertainty, but experts suggest buying the dip in Nasdaq ETFs could be a smart move
Rick Rieder from BlackRock is all in on buying the Nasdaq dip. He points out that the Nasdaq fell over 30% in 2022 but bounced back with a 43% gain in 2023. In the last year alone, it’s up more than 23%.
Historically, the Nasdaq has seen an average return of 215% during bull markets, lasting around 40 months. If this trend continues, we could see another 139% rise in the next 22 months.
So, what could drive this potential rally?
A big factor is the excitement around artificial intelligence (AI). The “Magnificent 7” tech giants—Alphabet, Amazon, Apple, Meta, Microsoft, NVIDIA, and Tesla—have been key players in lifting the Nasdaq after a tough 2022. Microsoft is leading the AI charge, with others like Alphabet and Amazon joining in. NVIDIA is also benefiting from this AI boom.
The Fed has started cutting rates, with the first cut in four years happening in September 2024, followed by two more in November and December. If inflation stays in check, we might see at least two more cuts in 2025.
The Nasdaq also has a strong presence in biotech. New drug launches and easier access to funds could help this sector thrive. Plus, mergers and acquisitions might give it an extra boost.
Consumers are holding up well, too. The Nasdaq-100 Index has a good chunk in consumer discretionary and staples. Even though consumer sentiment dipped a bit in January, December was the highest it’s been in eight months.
With all this in mind, there are several Nasdaq ETFs to consider, like QQQ, QQQM, QQEW, QQQJ, and QQQE.
If you want to stay updated on key ETF info, Zacks offers a free Fund Newsletter that covers top news and analysis weekly. You can also grab their report on the 7 Best Stocks for the Next 30 Days for free.
Just remember, the views shared here are those of the author and don’t necessarily reflect Nasdaq, Inc.
