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Nasdaq 100 Hits New Highs: 5 Best Stocks in the ETF
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Amid the broad market rally, the Nasdaq 100 index hit an all-time high in intraday trading on June 4, erasing all the coronavirus-related losses. In fact, it has become the first major U.S. stock index to reach record highs after coronavirus plunge. The benchmark has risen about 43% since hitting bottom on Mar 23. This indicates the start of a new bull market.
Better-than-expected earnings have added to the strength, leading to a spike in stocks. Additionally, unprecedented stimulus from the central bank and the government, hopes of a potential coronavirus vaccine and reopening of the economy instilled confidence. Further, the easing of restrictions has resulted in a pick-up in economic activities. The latest bouts of data indicate that economic damage from the coronavirus pandemic was less severe than anticipated. The rally continued even in the face of rising trade tension between the United States and China as well as civil unrest.
As a result, Invesco QQQ (QQQ - Free Report) , which serves as a proxy for the index, also hit new highs, having gained 42.5% from the March lows. 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 47.1% of the assets, while communication services holds 20.8% share. QQQ is one of the largest and most-popular ETFs in the large-cap space with AUM of $109.7 billion and average daily volume of around 49.1 million shares. It charges investors 20 bps in annual fees. The fund has a Zacks ETF Rank #1 (Strong Buy) with a Medium risk outlook (read: U.S. Outperforms YTD: 6 Top-Ranked ETF Winners).
Though most of the stocks in the fund’s portfolio have delivered strong returns since March lows, a few have gained in double digits. Below we have highlighted the five best-performing stocks in the ETF with their respective positions in the fund’s basket:
Top-Performing Stocks in QQQ
Tesla Inc. (TSLA - Free Report) : This company is the market leader in battery-powered electric car sales in the United States, owning around 60% of market share. The stock has surged nearly 99% since its March low and has 1.6% exposure in the fund’s basket. It has an expected earnings growth rate of 3430.8% for this year and has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.
Align Technology Inc. (ALGN - Free Report) : This medical device company designs, manufactures, and markets Invisalign clear aligners and iTero intraoral scanners and services for orthodontists and general practitioner dentists, and restorative and aesthetic dentistry. The stock has skyrocketed 89% in the same timeframe and accounts for 0.2% in the fund’s basket. Its earnings are expected to decline 41.6% this year. Align Technology has a Zacks Rank #4 (Sell).
eBay Inc. (EBAY - Free Report) : It operates the marketplace and classifieds platforms that connect buyers and sellers worldwide. eBay has risen 87.4% in the same timeframe and makes up for 0.3% share of the basket. It saw positive earnings estimate revision of a penny over the past 30 days and has an estimated earnings growth rate of 9.9%. eBay has a Zacks Rank #2 (read: Consumer Discretionary ETFs to Bet on in June).
lululemon athletica inc. (LULU - Free Report) : This yoga-inspired athletic apparel company designs, manufactures and distributes athletic apparel and accessories for women, men and female youth. The stock saw negative earnings estimate revision of 20 cents for the fiscal year (ending Jan 2021) in the past month and its earnings are expected to decline 9.5%. It has a Zacks Rank #3.
MercadoLibre Inc. (MELI - Free Report) : This is one of the largest e-commerce platforms in Latin America. The stock has climbed 83.6% since its March lows. It saw positive earnings estimate revision of 45 cents for this year over the past 30 days with an expected earnings growth rate of 63.1%. MercadoLibre has a Zacks Rank #3 and accounts for 0.4% of the fund.
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Nasdaq 100 Hits New Highs: 5 Best Stocks in the ETF
Amid the broad market rally, the Nasdaq 100 index hit an all-time high in intraday trading on June 4, erasing all the coronavirus-related losses. In fact, it has become the first major U.S. stock index to reach record highs after coronavirus plunge. The benchmark has risen about 43% since hitting bottom on Mar 23. This indicates the start of a new bull market.
Most of the gains were driven by surging technology stocks, especially the big companies like Amazon (AMZN - Free Report) , Alphabet (GOOGL - Free Report) , Microsoft (MSFT - Free Report) , Apple (AAPL - Free Report) and Facebook . These tech companies strengthened on stay-at-home trends and make up for roughly 20% of the Nasdaq 100 (read: 5 Solid Tech ETFs Available Below $35).
Better-than-expected earnings have added to the strength, leading to a spike in stocks. Additionally, unprecedented stimulus from the central bank and the government, hopes of a potential coronavirus vaccine and reopening of the economy instilled confidence. Further, the easing of restrictions has resulted in a pick-up in economic activities. The latest bouts of data indicate that economic damage from the coronavirus pandemic was less severe than anticipated. The rally continued even in the face of rising trade tension between the United States and China as well as civil unrest.
As a result, Invesco QQQ (QQQ - Free Report) , which serves as a proxy for the index, also hit new highs, having gained 42.5% from the March lows. 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 47.1% of the assets, while communication services holds 20.8% share. QQQ is one of the largest and most-popular ETFs in the large-cap space with AUM of $109.7 billion and average daily volume of around 49.1 million shares. It charges investors 20 bps in annual fees. The fund has a Zacks ETF Rank #1 (Strong Buy) with a Medium risk outlook (read: U.S. Outperforms YTD: 6 Top-Ranked ETF Winners).
Though most of the stocks in the fund’s portfolio have delivered strong returns since March lows, a few have gained in double digits. Below we have highlighted the five best-performing stocks in the ETF with their respective positions in the fund’s basket:
Top-Performing Stocks in QQQ
Tesla Inc. (TSLA - Free Report) : This company is the market leader in battery-powered electric car sales in the United States, owning around 60% of market share. The stock has surged nearly 99% since its March low and has 1.6% exposure in the fund’s basket. It has an expected earnings growth rate of 3430.8% for this year and has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.
Align Technology Inc. (ALGN - Free Report) : This medical device company designs, manufactures, and markets Invisalign clear aligners and iTero intraoral scanners and services for orthodontists and general practitioner dentists, and restorative and aesthetic dentistry. The stock has skyrocketed 89% in the same timeframe and accounts for 0.2% in the fund’s basket. Its earnings are expected to decline 41.6% this year. Align Technology has a Zacks Rank #4 (Sell).
eBay Inc. (EBAY - Free Report) : It operates the marketplace and classifieds platforms that connect buyers and sellers worldwide. eBay has risen 87.4% in the same timeframe and makes up for 0.3% share of the basket. It saw positive earnings estimate revision of a penny over the past 30 days and has an estimated earnings growth rate of 9.9%. eBay has a Zacks Rank #2 (read: Consumer Discretionary ETFs to Bet on in June).
lululemon athletica inc. (LULU - Free Report) : This yoga-inspired athletic apparel company designs, manufactures and distributes athletic apparel and accessories for women, men and female youth. The stock saw negative earnings estimate revision of 20 cents for the fiscal year (ending Jan 2021) in the past month and its earnings are expected to decline 9.5%. It has a Zacks Rank #3.
MercadoLibre Inc. (MELI - Free Report) : This is one of the largest e-commerce platforms in Latin America. The stock has climbed 83.6% since its March lows. It saw positive earnings estimate revision of 45 cents for this year over the past 30 days with an expected earnings growth rate of 63.1%. MercadoLibre has a Zacks Rank #3 and accounts for 0.4% of the fund.
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 >>