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5 Stocks That Powered Nasdaq ETF Last Week

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Wall Street ended the week on a positive note despite volatility. The tech-heavy Nasdaq Composite Index outperformed once again, gaining 2.6%, while the S&P 500 and the Dow Jones were up 1.9% and 1.7%, respectively. In this regard, Invesco QQQ (QQQ - Free Report) , which serves as a proxy to the Nasdaq Index, gained 2.9%.

As such, we have highlighted the five best-performing stocks of QQQ from last week that led the way higher in the portfolio. These include DexCom Inc. (DXCM - Free Report) , Align Technology (ALGN - Free Report) , Verisk Analytics (VRSK - Free Report) , Atlassian (TEAM - Free Report) , and Adobe Inc. (ADBE - Free Report) .

The outperformance came on the heels of a return of the risk factor at the end of the week. This is especially true as the rally in yields eased after comments from Fed officials calmed fears over red-hot inflation and higher-for-longer interest rates. Atlanta Fed President Raphael Bostic said that he's "very firmly" in favor of a quarter-point hike for now, adding that it's important for the central bank to move cautiously.

The 10-year yields clawed back below 4% after topping the highest levels in four months. As the tech sector relies on borrowing for superior growth, it is cheaper to borrow more money for further initiatives when interest rates are low (read: Inverse Treasury ETFs Soar as Yields See Big Monthly Gain).

Let’s take a closer look at the fundamentals of QQQ.

QQQ in Focus

Invesco QQQ provides exposure to the 101 largest domestic and international non-financial companies listed on the Nasdaq. Information technology accounts for 50.7% of the assets, while communication services and consumer discretionary make up for a 16.2% and 15.5% share, respectively.

Invesco QQQ is one of the largest and most-popular ETFs in the large-cap space, with AUM of $154.5 billion and an average daily volume of around 46.4 million shares. Invesco QQQ charges investors 20 bps in annual fees and has a Zacks ETF Rank #2 (Buy) with a Medium risk outlook.

Below, we have highlighted the above-mentioned five stocks in the ETF with their respective positions in the fund’s basket.

Top-Performing Stocks in QQQ

DexCom is a medical device company focused on the design, development and commercialization of continuous glucose monitoring systems. The stock jumped 11.2% last week and its earnings are expected to grow 21.8% this year.

DexCom makes up for 0.39% of assets in QQQ and has a Zacks Rank #3 (Hold). It has a Growth Score of B.

Align Technology manufactures and markets a system of clear aligner therapy, intra-oral scanners and CAD/CAM (computer-aided design and computer-aided manufacturing) digital services used in dentistry, orthodontics, and dental records storage. The stock climbed 10% and accounts for 0.2% in the fund’s basket.

Align Technology has an expected earnings growth rate of 2.8% for this year. It has a Zacks Rank #3.

Verisk Analytics is one of the leading data analytics providers serving customers in the insurance, energy and specialized markets, and financial services. The stock makes up for 0.2% of assets in the QQQ portfolio (read: Old Economy Investing is Back: Sector ETFs to Win).

Verisk Analytics gained 8.7% last week and has an expected earnings growth rate of 8.4% for this year. VRSK has a Zacks Rank #3.

Atlassian is a global leader and innovator in the enterprise collaboration and workflow software space. The company offers a suite of cloud-based software solutions, which help organizations, collaborate and manage their workforce such that the teams work better together. Shares of TEAM were up 7.8% last week. Atlassian has an estimated earnings growth rate of 29.01% for the fiscal year (ending June 2024).

Atlassian accounts for a 0.21% share in QQQ and has a Zacks ETF Rank #3. It has a Growth Score of B (read: Best Tech ETFs In Nasdaq's Worst Week Since December).

Adobe is one of the largest software companies in the world. It picks up licensing fees from customers, which form the bulk of its revenues. Adobe gained 6.7% last week and accounts for 1.3% in the fund’s basket.

Adobe is expected to see an earnings growth of 11.3% for the fiscal year (ending Nov 2023). It has a Zacks Rank #3 and a Growth Score of A.

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