History Suggests Nasdaq Could Rise Again in 2025: A Look at Micron Technology

The Nasdaq Composite (^IXIC) has enjoyed impressive growth over the past two years, buoyed by expanding prospects in the realm of artificial intelligence (AI). After remarkable gains of 43% in 2023 and 29% in 2024, the question arises: could the Nasdaq continue its upward trajectory in 2025?

Analyzing historical trends offers insights into what may lie ahead. Additionally, one semiconductor company stands out in the AI sector: Micron Technology (MU).

What Historical Trends Suggest for the Nasdaq in 2025

One key takeaway about the stock market is its resilience. History demonstrates that even in times of volatility and economic downturns, the capital markets typically recover stronger than before. The Nasdaq has also depicted this trend over the years.

The Nasdaq has only recorded annual losses on 14 occasions in its 55-year history, with severe declines of over 20% occurring just seven times. These significant drops corresponded with challenging periods such as the dot-com bubble, geopolitical issues, the subprime mortgage crisis, and a phase of unusually high inflation.

These patterns indicate that the Nasdaq often rebounds following a year of decline. Furthermore, the index's gains frequently extend for several years before it faces another dip. Therefore, despite the recent impressive gains of the Nasdaq, 2025 may also turn out to be a robust year for this tech-heavy index.

Why Micron Technology Catches My Attention

While many semiconductor companies have been in the spotlight recently, Micron Technology doesn't always receive the recognition it deserves. Instead, major attention has been on companies like Nvidia, Broadcom, and Taiwan Semiconductor Manufacturing.

These companies certainly play vital roles in the semiconductor industry, particularly with Nvidia's strong demand for graphics processing units (GPUs), which are crucial for running complex AI algorithms like those used in training large language models and machine learning applications.

Micron, however, specializes in high-bandwidth memory (HBM), essential for optimizing training and inference in AI applications. As ongoing trends suggest a growing investment in AI infrastructure, Micron is poised to benefit, with projections indicating the market for HBM chips could surpass $100 billion by 2030, a significant increase from current valuations.

Attractive Valuation of Micron Technology

Recently, Micron's shares rose by 27%, aligning with the broader S&P 500. However, they are still down over 30% from their peak, presenting an opportunity for investors. Micron's forward price-to-earnings (P/E) ratio stands at 15.3, which is considerably lower than many competitors in the chip industry and even below that of the S&P 500.

The importance of HBM chips cannot be overstated, yet many investors have overlooked Micron's pivotal role in this sector. This undervaluation makes Micron a compelling stock to consider as we look ahead to the new year and beyond.

Nasdaq, Stocks, Micron