ChatGPT and Netscape Keep Track
If history does not repeat itself, it can at least rhyme. One good example of this has been the performance of the Tech-heavy Nasdaq since the AI era began in earnest with the release of ChatGPT in November 2022. In our chart below that we first published in early 2024, we show the move in the Nasdaq Composite since ChatGPT's release and compare that to the move in the index following the release of the first modern web browser, NetScape, in December 1994.
As the chart shows, the moves in the Nasdaq following the release of ChatGPT and Netscape have been eerily similar. Putting a number to it, the two lines have an astoundingly high correlation coefficient of 0.95. For a refresher from your 101 statistics class, a coefficient of 1 would indicate the two lines move identically; so for real world statistics, this is about as close as it gets!
In terms of absolute performance, the rally in the Nasdaq has been slightly weaker this go around than it was in the 1990s. Since the release of ChatGPT, the Nasdaq has risen 105%, which compares to a 132.5% gain for the index from December 19, 1994 up through the next 703 trading days (through 9/29/1997). The index doubling in a little more than a two and a half year span is impressive in its own right. With that said, if these two lines were to continue to track one another down the road, history would suggest that there is still plenty of steam left in the rally.
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