MorganStanley created a NNZ index to track the nanotech sector on the NASDAQ.
Here’s a look at the performance:

R&D magazine attributes the heating up of index in 2004 to :

Continuing reduction in the cost to produce, measure, and control these thin layers of materials. Working at the nanoscale level is now pretty much pervasive in most semiconductor processes and the instrumentation to observe and analyze these processes and materials, while still expensive, has become within the reach of more researchers and manufacturers. The other part of the answer lies in nanotech’s convergence with biotech and other life science areas. Biotech interest has gone through some wild swings in the investment community over the past decade and even today is either flat or even temporarily somewhat in decline. But, the ability to more efficiently manage and analyze living materials at the nanoscale level, provides biotech researchers with abilities they didn’t have or couldn’t afford just a few years ago. Fully a third of the 25 companies on the NNZ Index are biotech companies.