History says tech stocks trend this way after Nasdaq finishes year up 30%

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Nasdaq hits another record high—Here's where market history says it could...
Key Points
  • The Nasdaq Composite Index has a recent track record of following big annual gains with another solid, if not spectacular, year. 

The Nasdaq Composite hit another record high on Monday to kick off the holiday week, with the tech-heavy index now on pace to finish the year up well over 30%. That has happened before. In fact, over the past 25 years, the Nasdaq has jumped 30% or more in a year on six other occasions. Following those annual periods, the next year's Nasdaq return has been solid, if not spectacular.

The Nasdaq has average a return of approximately 12% in the years after 30%-plus gains, trading positively 83% of the time, according to a CNBC analysis of hedge fund trading tool Kensho. The S&P infotech sector, tracked by the Technology Select Sector SPDR ETF, also has averaged about 12% in the yeas after a huge run for the Nasdaq.

Both tech-heavy indexes outperform the S&P 500, which adds about 10% the next year.