The tech-heavy Nasdaq-100 index fell 33% in 2022, plunging into a bear market. But it recovered all of those losses in 2023, and closed at a new all-time high in December, which -- technically speaking -- marked the beginning of a new bull market for that particular index.

In fact, according to historical data going back to the establishment of the Nasdaq-100 in 1986, rebound years like 2023 have always been followed by a second positive year. That bodes well for 2024, especially considering the favorable macroeconomic tailwinds like falling inflation and an expected drop in interest rates.

There are still some small-cap technology stocks trading well below their best-ever levels, and a new bull market could see them recover some ground. Here's why investors should consider making Lemonade (LMND 2.11%) and Snap (SNAP -3.30%) part of their 2024 New Year's resolutions.

1. Lemonade

Artificial intelligence (AI) was a major theme in the stock market last year, but the technology is old news for Lemonade. The tech-focused insurance company has successfully monetized AI for years, and its approach is resonating with the 2 million customers it serves across the renters, homeowners, life, pet, and car insurance markets.

If you're like me, you've probably had a frustrating experience dealing with traditional insurance companies. The claims process can be especially stressful, with lengthy delays and numerous phone conversations. Well, Lemonade's AI chatbot, nicknamed "Jim," currently holds the world record for fastest-ever claims payout -- at two seconds! In fact, it autonomously handles about half of Lemonade's incoming claims and pays them out in under three minutes, with no human input.

That's the power of AI. But Lemonade has another chatbot called Maya, which can write quotes for new potential customers in under 90 seconds via its website. So, as a Lemonade policyholder, there's it's likely you will never be left in the lurch by bureaucratic, human-led processes.

Lemonade also uses AI extensively in the background to ensure customers are charged accurate premiums. It deployed an AI model called Lifetime Value 6 (LTV6) in 2022, which predicts how likely a customer is to make a claim, the probability of them switching insurers, and whether they would buy multiple Lemonade policies. Furthermore, it analyzed the company's performance in different geographic markets, so Lemonade could quickly adjust its product mix and marketing spending.

Lemonade is now up to LTV8, with LTV9 on the way, and each iteration is more advanced than the last.

The company will report its official financial results for the full 2023 year in February, and it's on track to deliver a record $422 million in revenue, which would mark a whopping 64% increase year over year. As of the latest quarter (Q3 2023 ended Sept. 30), Lemonade's average premium per customer and in-force premium were at all-time highs.

Lemonade stock is down 88% from its peak, which was set during the tech frenzy of 2021, when investors assigned an ambitious valuation to the company. But it has already logged a gain of 14% in 2024 while the Nasdaq-100 is flat, and the company has the fundamentals and the growth potential to warrant more upside this year.

Two excited friends taking a selfie at a sunny European location.

Image source: Getty Images.

2. Snap

Snap is the parent company of the social media platform Snapchat. Its stock is also heavily beaten down, trading down roughly 79% from its all-time high. However, it appears to be on the road to recovery, with an 88% gain in the last 12 months following a string of upgrades from Wall Street analysts.

Snap draws almost all of its revenue from selling advertising spots on Snapchat, but businesses trimmed their budgets in 2022 as interest rates soared, which led to challenging economic conditions. A recovery might be in the cards, with Snap's revenue growing by 5% year over year in the latest quarter (Q3 2023 ended Sept. 30), following a series of contractions.

In that same period, Snap's main competitor, Meta Platforms, logged a record amount of advertising revenue, which is another sign the industry is bouncing back. Meta is significantly larger than Snap, with 3.1 billion daily active users across Facebook, Instagram, and WhatsApp, so it's understandably recovering more quickly.

Snap has worked hard to innovate despite the challenging circumstances. The company launched a subscription service in 2022 called Snapchat+, which has attracted 7 million paying users in just 18 months. It gives subscribers access to new features before everyone else for $3.99 per month. Snapchat+ subscribers, for example, were the first to test the new My AI virtual assistant launched in 2023, which is powered by OpenAI's ChatGPT technology.

Snap also continues to invest in its augmented reality (AR) technology. The company developed a unique system to help advertisers quickly create AR experiences to boost engagement among target users. A business can take a photo of a product, and Snap will automatically render an AR version of it that users can try on virtually with their smartphone camera. Watchmaker Fossil experienced an 80% increase in conversions with the help of such AR-based ads.

While Snap's revenue growth has been sluggish over the last couple of years, there is a huge bright spot in its business. A record number of people are using Snapchat, with 406 million daily active users in the third quarter of 2023. Once the ad market fully rebounds, Snap is going to have more monetizable users than ever before, which could supercharge its revenue growth. Plus, if advertisers continue seeing great results with AR, that might also lead to more ad dollars flowing Snapchat's way.

As I mentioned, Wall Street is quickly warming up to Snap stock. In December, Wells Fargo analysts increased their price target from $8 to $22, and analyst firm Guggenheim also upgraded the stock to a buy rating. There are no guarantees in the stock market, but if the upswing in Snap's business continues, now might prove to be the best time to buy in.