The Surge – An Abundance of Practical Insight

November 2, 2025

The Nasdaq 100’s Remarkable Rise

Over the last ten years, the Nasdaq 100 has seen an annual growth rate close to 20%.

Since hitting a low in March 2009, it’s been an impressive rise of around 22% each year. That’s a lengthy stretch, with annual gains that would likely make even Warren Buffett raise an eyebrow.

This period of growth has certainly felt extraordinary.

We can observe that the top 10 companies now represent over half of the index. You probably know which ones they are.

There’s a lot of conversation about whether we’re in a bubble.

Defining a bubble isn’t straightforward. You can’t rely solely on checklists because it’s a mix of various evaluations, expectations, and even emotions. It’s truly both quantitative and qualitative.

While statistics offer some insight, I wanted to examine how today’s returns measure up against historical bubbles. So, I looked into the total returns during the Roaring Twenties, the Japanese market in the 1980s, and the dot-com bubble of the 1990s, alongside the Nasdaq 100’s performance over the last ten years.

I have to admit, the figures are a bit alarming.

We’re not quite at the crazy levels of the dot-com era yet, but it’s interesting to note how closely the past decade resembles the Roaring Twenties and the Japanese market.

I honestly didn’t expect the figures to align this closely.

Historically, most other market cycles have ended in significant downturns.

Are we bracing for something similar again?

It’s hard to say.

A market crash is always on the horizon.

Maybe we should consider that today’s tech giants are arguably the best in history.

After the dot-com bubble burst, the Nasdaq experienced an over 80% decline. From 2000 to 2008, the Nasdaq 100 dropped a total of 50%, which translates to an annual decrease of about -8%.

In the 13 years following, the total return for the Nasdaq 100 was just 1%. That’s a staggering less-than-1% annually for 14 years. It was a lost decade, followed by slow recovery.

From 2000 until now, the average annual return for the Nasdaq stands at a fairly mediocre 8.4%.

We’re looking at a mix of a harsh bear market followed by a bullish phase. Whether this is part of a complete market cycle is up for debate, especially since 2000 marked the peak of the dot-com bubble.

Tech stocks have always been on fire. No denying this is quite possibly one of the strongest bull markets we’ve seen.

So, what’s the next step?

A crash could be looming. I wouldn’t be shocked if how people feel about the market is ahead of its actual fundamentals. This seems common during rapid innovation periods.

I’d feel more comfortable forecasting lower returns for tech stocks ahead rather than predicting a sharp downturn at this moment. It’s reminiscent of a police crackdown. There have been chances to say returns would slow many times during the last decade, but it hasn’t happened.

It’s unrealistic for tech stocks to maintain a 20% growth rate indefinitely. I feel confident in saying that.

But then again… perhaps history won’t repeat itself this time.

Investing largely in tech stocks has led to impressive payouts over the years.

At some point, I firmly believe diversification will be crucial.

I can’t really say when that might be.

But it’s precisely why we need to diversify.