History Indicates the Nasdaq Will Rise in 2026: The Top Stocks to Purchase With $250 Before It Happens
The Nasdaq Composite Index has seen a notable increase—almost 20%—since the start of the year.
Tech companies are experiencing robust growth, largely driven by the ongoing surge in AI technology.
10 stocks we like better than Applied Digital
The Nasdaq index’s performance is quite impressive, especially after a rocky beginning to the year that saw it drop significantly in the first quarter.
There’s a reasonable expectation that Nasdaq could maintain its upward trend into 2026. As Ryan Detrick, a chief market strategist, mentioned in a CNBC interview, historically, once a bull market reaches three years, it often extends to about eight years on average.
Considering that the current bull market celebrated its third year last month, and with strong quarterly earnings from major tech firms, it seems the Nasdaq’s recent rally might have staying power.
If you happen to have $250 ready to invest for the long haul, perhaps think about grabbing shares of Nvidia and Applied Digital. These stocks seem poised for growth, especially in the tech sector, next year.
Nvidia is leading the field in AI chip manufacturing and is up about 34% year to date, currently sitting around $180 per share. With the demand for its GPUs still outpacing supply, it looks like there’s more room for growth.
During a recent earnings call, CEO Jensen Huang noted the impressive revenue from their Blackwell series and highlighted that their cloud GPUs are sold out. The increasing demand for AI-related hardware is quite evident, as many large data centers are now integrating Nvidia’s chips.
Nvidia has a significant backlog of $307 billion in pre-orders, which is a stark contrast to the $187 billion in revenue generated over the previous four quarters. This trend has analysts optimistic about the company’s future growth prospects.
Given that Nvidia continues to ramp up its AI chip orders, it may exceed current revenue growth expectations. Plus, the company has been steadily building its inventory to meet increasing demand, with inventories up 32% and supply commitments rising by 63% last quarter.
Analysts predict Nvidia’s earnings will likely jump 58% to $7.43 per share in fiscal 2027. Currently, the stock trades at around 23 times forward earnings—considerably lower than the Nasdaq 100 index’s ratio of 32. If Nvidia maintains its growth trajectory, market valuation may improve next year, leading to a rise in stock prices.
On the other hand, Applied Digital’s stock has surged 211% in 2025, but it’s down by about 33% from its high in October. Investing in this data center company after such a decline can be a wise choice.
Applied Digital specializes in constructing and operating data centers aimed at AI and high-performance computing, with two new projects underway in North Dakota. Notably, they’ve secured a 15-year lease for one of their data centers with CoreWeave.
Future projections show that Applied Digital aims to boost online capacity to 700 megawatts by 2027, up from the current 286 MW. With their existing lease indicating a $16 billion revenue potential, and an additional $5 billion in funding to develop over 2,000 MW of capacity in the long run, the company seems well-positioned for growth.
All things considered, Applied Digital’s future growth looks promising.
As demand for AI data centers grows, Applied Digital is likely to see significant growth in the coming years. However, the current stock trades at a high valuation of 28 times sales, yet its projected earnings growth may help justify this. If it later trades at 8.4 times sales, which aligns with the average for the tech sector, and achieves the $970 million in expected revenue, its market cap could reach $8.4 billion.
That would represent a 27% increase from now, which is quite appealing. Given the rapid growth in AI data centers, it would not be surprising if Applied Digital exceeds even those expectations, leading to a potentially favorable valuation.
Before making a decision on investing in Applied Digital, keep these points in mind:
According to Motley Fool Stock Advisor, their analysts haven’t included Applied Digital in their “Best 10 Stocks” list. These recommendations highlight stocks that could offer substantial returns in the years ahead.
Referencing past recommendations can be quite enlightening—for instance, if you had invested $1,000 in Netflix back in December 2004, that investment would now be worth over $580,000. Similarly, a $1,000 investment in Nvidia from April 2005 would be valued at over $1 million today.
To highlight, the Stock Advisor average return currently stands at 1,004%, compared to the S&P 500’s 194%—that’s quite a difference. So, if you’re interested in finding solid investment ideas, it might be worth exploring their latest recommendations.
*Stock Advisor returns as of November 24, 2025
The Motley Fool has a position in and recommends Nvidia.
