The Nasdaq-100 Technology Sector index has been in fine form in the past year, clocking impressive gains of 50%, as some of the key components of this index have witnessed a red-hot rally thanks to the proliferation of artificial intelligence (AI).
Shares of Nasdaq-100 component Nvidia (NASDAQ: NVDA), for instance, have shot up 221% in the past year. The chipmaker’s terrific rally is justified by its outstanding growth. Nvidia’s monopoly-like position in the market for AI chips — where it holds 95%-plus market share according to some estimates — has supercharged the company’s top and bottom lines, which is evident from the chart below.
What’s more, analysts are expecting Nvidia’s earnings to increase at a healthy annual rate of 38% over the next five years. Based on Nvidia’s earnings of $12.96 per share in the recently concluded fiscal 2024, its bottom line could jump to almost $65…
