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5 Stocks That Powered Nasdaq ETF in the First Half
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The Nasdaq Composite Index outperformed in the first half of 2024, gaining about 18%. The artificial intelligence (AI) craze, hopes of rate cuts and the rising share of the "Magnificent Seven" have been driving the market higher.
Invesco QQQ (QQQ - Free Report) , which serves as a proxy to the Nasdaq Index, has gained 17% in the year-to-date timeframe. We have highlighted the five best-performing stocks of QQQ this year that led the way higher in the portfolio. These are NVIDIA Corporation (NVDA - Free Report) , Arm Holdings Limited (ARM - Free Report) , Constellation Energy Corporation (CEG - Free Report) , Micron Technology (MU - Free Report) and Broadcom (AVGO - Free Report) .
Most of the gains were driven by five “mega-cap” tech companies — NVIDIA, Microsoft (MSFT), Amazon (AMZN), Meta Platforms (META) and Apple (AAPL). NVIDIA alone accounted for 31% of the market’s first-half advance. NVIDIA, Apple and Microsoft are in a race to become the world’s most valuable company and hit a market capitalization of $4 trillion on surging enthusiasm over AI capabilities (read: ETFs to Tap as NVIDIA Becomes the Most Valuable Company).
The AI boom will continue to fuel the rally in the sector, with companies investing huge sums in this technology. The expansion of AI applications holds the promise of ushering in fresh opportunities for growth in the tech sector and beyond. According to a new report by Grand View Research, the global artificial intelligence market is expected to witness a CAGR (2024-2030) of 36.6% to reach $811.75 billion by 2030.
In its latest meeting, the Fed penciled in one rate cut for this year and projected four cuts in 2025. The central bank has altered the language in its statement, noting that there has been “modest further progress toward the committee’s 2% inflation objective.” Previously, the statement pointed to a “lack” of further progress. This signals a period of higher interest rates for a while. Tech titans have shown strong resilience in such a scenario. And, when the Fed starts cutting rates later this year, technology stocks will receive a boost. As the tech sector relies on borrowing for superior growth, borrowing more money for further initiatives is cheaper when interest rates are low.
Let’s take a closer look at the fundamentals of QQQ.
QQQ in Focus
Invesco QQQ offers exposure to the 102 largest domestic and international non-financial companies listed on the Nasdaq. Information technology accounts for 58.9% of the assets, while consumer discretionary makes up 17.9% share.
Invesco QQQ is one of the largest and most popular ETFs in the large-cap space, with an AUM of $288.2 billion and an average daily volume of around 32 million shares. Invesco QQQ charges investors 20 bps in annual fees and has a Zacks ETF Rank #2 (Buy) with a Medium risk outlook (read: Nasdaq ETFs Set for Further Growth in 2024).
Below, we have highlighted the abovementioned five stocks in the ETF with their respective positions in the fund’s basket.
Top-Performing Stocks in QQQ
NVIDIA is the worldwide leader in visual computing technologies and the inventor of the graphic processing unit or GPU. The stock skyrocketed 151% in the first half and its earnings are expected to grow more than double this fiscal year (ending January 2025).
Arm Holdings provides processor designs and software platforms. The stock makes up for 0.13% of the assets in the QQQ portfolio.
Arm Holdings gained 111.4% in the first half and has an expected earnings growth rate of 22% for the fiscal year (ending March 2025). It has a Zacks Rank #3 (Hold) and a Growth Score of A.
Constellation Energy generates and markets electricity. It sells natural gas, renewable energy and other energy-related products and services. The stock has risen 75.4% so far this year. It makes up 0.42% of the assets in the QQQ portfolio.
Constellation Energy has an expected earnings growth rate of 52.7% for this year and a Zacks Rank #1.
Micron Technology has established itself as one of the leading worldwide providers of semiconductor memory solutions. The stock makes up for 0.98% of the assets in the QQQ portfolio.
Micron Technology has gained 54.1% and has an expected earnings growth rate of 124.5% for the fiscal year (ending August 2024). It has a Zacks Rank #2 (Buy) and a Growth Score of B.
Broadcom is a premier designer, developer and global supplier of a broad range of semiconductor devices with a focus on complex digital and mixed signal complementary metal oxide semiconductor-based devices and analog III-V-based products. The stock soared about 47% in the first half and accounts for a 5% share in the QQQ portfolio (read: Broadcom Jumps on Q2 Earnings Beat: ETFs to Buy).
Broadcom has an estimated earnings growth rate of 12.2% for the fiscal year (ending October 2024) and a Zacks Rank #3.
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5 Stocks That Powered Nasdaq ETF in the First Half
The Nasdaq Composite Index outperformed in the first half of 2024, gaining about 18%. The artificial intelligence (AI) craze, hopes of rate cuts and the rising share of the "Magnificent Seven" have been driving the market higher.
Invesco QQQ (QQQ - Free Report) , which serves as a proxy to the Nasdaq Index, has gained 17% in the year-to-date timeframe. We have highlighted the five best-performing stocks of QQQ this year that led the way higher in the portfolio. These are NVIDIA Corporation (NVDA - Free Report) , Arm Holdings Limited (ARM - Free Report) , Constellation Energy Corporation (CEG - Free Report) , Micron Technology (MU - Free Report) and Broadcom (AVGO - Free Report) .
Most of the gains were driven by five “mega-cap” tech companies — NVIDIA, Microsoft (MSFT), Amazon (AMZN), Meta Platforms (META) and Apple (AAPL). NVIDIA alone accounted for 31% of the market’s first-half advance. NVIDIA, Apple and Microsoft are in a race to become the world’s most valuable company and hit a market capitalization of $4 trillion on surging enthusiasm over AI capabilities (read: ETFs to Tap as NVIDIA Becomes the Most Valuable Company).
The AI boom will continue to fuel the rally in the sector, with companies investing huge sums in this technology. The expansion of AI applications holds the promise of ushering in fresh opportunities for growth in the tech sector and beyond. According to a new report by Grand View Research, the global artificial intelligence market is expected to witness a CAGR (2024-2030) of 36.6% to reach $811.75 billion by 2030.
In its latest meeting, the Fed penciled in one rate cut for this year and projected four cuts in 2025. The central bank has altered the language in its statement, noting that there has been “modest further progress toward the committee’s 2% inflation objective.” Previously, the statement pointed to a “lack” of further progress. This signals a period of higher interest rates for a while. Tech titans have shown strong resilience in such a scenario. And, when the Fed starts cutting rates later this year, technology stocks will receive a boost. As the tech sector relies on borrowing for superior growth, borrowing more money for further initiatives is cheaper when interest rates are low.
Let’s take a closer look at the fundamentals of QQQ.
QQQ in Focus
Invesco QQQ offers exposure to the 102 largest domestic and international non-financial companies listed on the Nasdaq. Information technology accounts for 58.9% of the assets, while consumer discretionary makes up 17.9% share.
Invesco QQQ is one of the largest and most popular ETFs in the large-cap space, with an AUM of $288.2 billion and an average daily volume of around 32 million shares. Invesco QQQ charges investors 20 bps in annual fees and has a Zacks ETF Rank #2 (Buy) with a Medium risk outlook (read: Nasdaq ETFs Set for Further Growth in 2024).
Below, we have highlighted the abovementioned five stocks in the ETF with their respective positions in the fund’s basket.
Top-Performing Stocks in QQQ
NVIDIA is the worldwide leader in visual computing technologies and the inventor of the graphic processing unit or GPU. The stock skyrocketed 151% in the first half and its earnings are expected to grow more than double this fiscal year (ending January 2025).
NVIDIA makes up for 7.92% of the assets in QQQ and has a Zacks Rank #1 (Strong Buy). It has a Growth Score of A. You can see the complete list of today’s Zacks #1 Rank stocks here.
Arm Holdings provides processor designs and software platforms. The stock makes up for 0.13% of the assets in the QQQ portfolio.
Arm Holdings gained 111.4% in the first half and has an expected earnings growth rate of 22% for the fiscal year (ending March 2025). It has a Zacks Rank #3 (Hold) and a Growth Score of A.
Constellation Energy generates and markets electricity. It sells natural gas, renewable energy and other energy-related products and services. The stock has risen 75.4% so far this year. It makes up 0.42% of the assets in the QQQ portfolio.
Constellation Energy has an expected earnings growth rate of 52.7% for this year and a Zacks Rank #1.
Micron Technology has established itself as one of the leading worldwide providers of semiconductor memory solutions. The stock makes up for 0.98% of the assets in the QQQ portfolio.
Micron Technology has gained 54.1% and has an expected earnings growth rate of 124.5% for the fiscal year (ending August 2024). It has a Zacks Rank #2 (Buy) and a Growth Score of B.
Broadcom is a premier designer, developer and global supplier of a broad range of semiconductor devices with a focus on complex digital and mixed signal complementary metal oxide semiconductor-based devices and analog III-V-based products. The stock soared about 47% in the first half and accounts for a 5% share in the QQQ portfolio (read: Broadcom Jumps on Q2 Earnings Beat: ETFs to Buy).
Broadcom has an estimated earnings growth rate of 12.2% for the fiscal year (ending October 2024) and a Zacks Rank #3.