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Amid the trade tensions between the United States and its key allies, investors continued to pour money into fast-growing companies, pushing the Nasdaq Composite Index to new highs for the second consecutive day since Mar 13. In fact, it has been outperforming the other major large cap indices by a wide margin on a year-to-date basis.
The strength in the technology sector, which accounts for nearly half of the index, helped Nasdaq surge on a gain of 10.6% this year compared with gains of 0.3% for the Dow Jones and 2.8% for the S&P 500. Most of the rally was driven by the resurgence of the FAAMNG stocks and the strength in chipmakers, thanks to robust earnings, a rising interest rate scenario and solid demand for cutting-edge technology.
Additionally, latest bouts of upbeat data, which indicates that the economy has been on a strong path, boosted confidence and investors’ risk appetite.
As a result, Invesco QQQ (QQQ - Free Report) , which serves as a proxy for the index, has climbed 12.4% so far this year. Let’s take a closer look at the fundamentals of QQQ.
QQQ in Focus
This ETF provides exposure to 103 largest domestic and international non-financial companies listed on the Nasdaq by tracking the Nasdaq 100 Index. Information technology accounts for 62.3% of the assets, while consumer discretionary takes a 22.1% share. QQQ is one of the largest and most popular ETFs in the large-cap space with AUM of $67.5 billion and average daily volume of around 41.9 million shares. It charges investors 20 bps in annual fees. The fund has a Zacks ETF Rank #2 (Buy) with a Medium risk outlook (read: Nasdaq at All-Time High: Play These 5 ETFs).
Though most of the stocks in the fund’s portfolio delivered strong returns, a few were the real stars, having gained more than 30%. Below we have highlighted five best-performing tech stocks in the ETF with their respective positions in the fund’s basket:
Top-Performing Tech Stocks in QQQ
Adobe Systems Incorporated (ADBE - Free Report) : This California-based company is one of the largest software companies in the world. The stock has seen positive earnings estimate revision of 23 cents for the fiscal ending November 2018 over the past three months, with projected earnings growth of 48.26%. It has surged 44.6% this year and carries a Zacks Rank #3 (Hold) and a VGM Score of C. The stock holds a 1.52% share in QQQ.
Micron Technology Inc (MU - Free Report) : This Idaho-based company is one of the world's leading providers of advanced semiconductor solutions. The stock has gained about 43.7% this year and saw solid earnings estimate revision of 96 cents over the past three months for the fiscal ending August 2018, with an expected earnings growth rate of 132.46%. Micron Technology has a Zacks Rank #1 (Strong Buy) and a VGM Score of A. The stock accounts for 0.8% of the fund. You can see the complete list of today’s Zacks #1 Rank stocks here.
Seagate Technology plc (STX - Free Report) : This Ireland-based company offers a portfolio of hard disc drives, solid state drives and solid state hybrid drives. It saw impressive earnings estimate revision of 47 cents over the past 90 days for the fiscal ending June 2018, with expected earnings growth of 29.61%. The stock has a Zacks Rank #1 and a VGM Score of A. STX makes up for just 0.21% allocation in the fund’s basket and has delivered incredible returns of nearly 37.4% this year.
NVIDIA Corporation (NVDA - Free Report) : This California-based company is a worldwide leader in graphics processors and media communications devices. This stock has risen 36.9% so far this year and has 2% exposure in the fund’s basket. It saw solid earnings estimate revision of 88 cents over the past three months for the fiscal ending January 2019, with an expected earnings growth rate of 61.18%. NVIDIA has a Zacks Rank #1 and a VGM Score of C (read: 5 Reasons to Bet on the Rebound in Semiconductor ETFs).
Activision Blizzard : This California-based company is the world's most successful standalone interactive entertainment company. Though the stock saw negative earnings estimate revision of a couple of cents for this year over the past three months, it is expected to generate substantial earnings growth of 14.91%. The stock has rallied about 31.2% this year and makes up for 0.7% of the fund. Currently, ATVI has a Zacks Rank #3 and a VGM Score of D.
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5 Tech Stocks Pushing Nasdaq ETF to New Highs
Amid the trade tensions between the United States and its key allies, investors continued to pour money into fast-growing companies, pushing the Nasdaq Composite Index to new highs for the second consecutive day since Mar 13. In fact, it has been outperforming the other major large cap indices by a wide margin on a year-to-date basis.
The strength in the technology sector, which accounts for nearly half of the index, helped Nasdaq surge on a gain of 10.6% this year compared with gains of 0.3% for the Dow Jones and 2.8% for the S&P 500. Most of the rally was driven by the resurgence of the FAAMNG stocks and the strength in chipmakers, thanks to robust earnings, a rising interest rate scenario and solid demand for cutting-edge technology.
Notably, Apple (AAPL - Free Report) , Amazon (AMZN - Free Report) and Microsoft (MSFT - Free Report) are setting new milestones in recent trading sessions. Netflix (NFLX - Free Report) and Twitter also supported the rally (read: Social Media ETFs to Gain as Twitter Prepares for S&P 500).
Additionally, latest bouts of upbeat data, which indicates that the economy has been on a strong path, boosted confidence and investors’ risk appetite.
As a result, Invesco QQQ (QQQ - Free Report) , which serves as a proxy for the index, has climbed 12.4% so far this year. Let’s take a closer look at the fundamentals of QQQ.
QQQ in Focus
This ETF provides exposure to 103 largest domestic and international non-financial companies listed on the Nasdaq by tracking the Nasdaq 100 Index. Information technology accounts for 62.3% of the assets, while consumer discretionary takes a 22.1% share. QQQ is one of the largest and most popular ETFs in the large-cap space with AUM of $67.5 billion and average daily volume of around 41.9 million shares. It charges investors 20 bps in annual fees. The fund has a Zacks ETF Rank #2 (Buy) with a Medium risk outlook (read: Nasdaq at All-Time High: Play These 5 ETFs).
Though most of the stocks in the fund’s portfolio delivered strong returns, a few were the real stars, having gained more than 30%. Below we have highlighted five best-performing tech stocks in the ETF with their respective positions in the fund’s basket:
Top-Performing Tech Stocks in QQQ
Adobe Systems Incorporated (ADBE - Free Report) : This California-based company is one of the largest software companies in the world. The stock has seen positive earnings estimate revision of 23 cents for the fiscal ending November 2018 over the past three months, with projected earnings growth of 48.26%. It has surged 44.6% this year and carries a Zacks Rank #3 (Hold) and a VGM Score of C. The stock holds a 1.52% share in QQQ.
Micron Technology Inc (MU - Free Report) : This Idaho-based company is one of the world's leading providers of advanced semiconductor solutions. The stock has gained about 43.7% this year and saw solid earnings estimate revision of 96 cents over the past three months for the fiscal ending August 2018, with an expected earnings growth rate of 132.46%. Micron Technology has a Zacks Rank #1 (Strong Buy) and a VGM Score of A. The stock accounts for 0.8% of the fund. You can see the complete list of today’s Zacks #1 Rank stocks here.
Seagate Technology plc (STX - Free Report) : This Ireland-based company offers a portfolio of hard disc drives, solid state drives and solid state hybrid drives. It saw impressive earnings estimate revision of 47 cents over the past 90 days for the fiscal ending June 2018, with expected earnings growth of 29.61%. The stock has a Zacks Rank #1 and a VGM Score of A. STX makes up for just 0.21% allocation in the fund’s basket and has delivered incredible returns of nearly 37.4% this year.
NVIDIA Corporation (NVDA - Free Report) : This California-based company is a worldwide leader in graphics processors and media communications devices. This stock has risen 36.9% so far this year and has 2% exposure in the fund’s basket. It saw solid earnings estimate revision of 88 cents over the past three months for the fiscal ending January 2019, with an expected earnings growth rate of 61.18%. NVIDIA has a Zacks Rank #1 and a VGM Score of C (read: 5 Reasons to Bet on the Rebound in Semiconductor ETFs).
Activision Blizzard : This California-based company is the world's most successful standalone interactive entertainment company. Though the stock saw negative earnings estimate revision of a couple of cents for this year over the past three months, it is expected to generate substantial earnings growth of 14.91%. The stock has rallied about 31.2% this year and makes up for 0.7% of the fund. Currently, ATVI has a Zacks Rank #3 and a VGM Score of D.
Want key ETF info delivered straight to your inbox?
Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week. Get it free >>