After a 33% plunge in 2022, the Nasdaq finished 2023 up 43%, its best year since 2020, led by Nvidia, which soared 239%, and Meta, which jumped almost 200%
up almost 200% in 2023 Zuckerberg's “year of efficiency” delivered [image] LinkedIn: Emil Protalinski : Tech stocks in 2023, sorted by market cap
The closing figures matter because the gains were concentrated in two bellwether companies: Nvidia’s advance aligned with AI optimism across large technology stocks, while Meta’s rise reflected investor approval of Zuckerberg’s efficiency push.
First-order effects
Nvidia and Meta finish 2023 with sharply higher market valuations, making them the principal contributors to the Nasdaq’s 43% annual rebound.
The Nasdaq reverses a substantial portion of its 2022 decline, with investor returns increasingly tied to the performance of a small group of large technology stocks.
Second-order effects
The outperformance raises the benchmark for other large technology companies seeking to demonstrate either AI-linked growth or a credible efficiency narrative.
Capital-market attention shifts toward the companies most associated with AI spending and monetization, reinforcing Nvidia’s and Meta’s relative influence within tech-sector performance.
Third-order effects
If this concentration persists, broad-market index outcomes will become more sensitive to a handful of megacap technology stocks—a pattern later reflected in six companies reaching 30% of the S&P 500 their growing share of the index.
The rally is an early marker of an AI infrastructure-led market cycle, though the durability of that cycle depends on whether AI optimism translates into sustained business results rather than valuation expansion alone.
The trend: The 2023 rebound is part of an AI infrastructure supercycle in which a small set of large technology platforms and suppliers increasingly drives equity-market returns.
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While the Nasdaq was down 33% in 2022 & up 43% in 2023, no one should be under the illusion that they broke even. An investor would need to earn almost 50% in 2023 to break even. Aside from that, almost all of the gain in the market came from 7 stocks. [embedded post]
What the volatility of $META's stock taught me: In theory, all investors praise companies that have the “capacity to suffer” (i.e. companies that are willing to sacrifice short-term profits for long-term gains). In practice, most investors hate such companies, will sell their st…
AI premium: The Magnificent 7 trade at over 32x estimated earnings, a 50% premium to the S&P's 21x multiple. $NVDA $AAPL $AMZN $GOOG $META $MSFT $TSLA [image]
As we approach year end, you will hear so much nonsense. Remember this one from Apple, end of 2011. Saxo Bank predicted that the stock will plummet 50% in 2012, from then $426.70 (split adjusted $15.24). [image]
Apple's stock is up 50% this year and it's the largest company in the world with a market cap over $3 trillion. And this is the headline today... [image]