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Nasdaq Tops 17K: 5 Best-Performing Stocks in ETF YTD

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The Nasdaq Composite Index hit a new record high, topping the 17,000 level for the first time ever. Solid corporate earnings and rate cut bets have been driving stocks higher. In particular, NVIDIA’s blockbuster earnings spread huge optimism into the stock market along with the global artificial intelligence (AI) boom. This led the Nasdaq to move further higher. The tech-heavy index has risen 13.4% so far this year.

Invesco QQQ (QQQ - Free Report) , which serves as a proxy to the Nasdaq Index, gained 12% in the year-to-date timeframe. As such, 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) , Constellation Energy Corporation (CEG - Free Report) , Micron Technology (MU - Free Report) , Moderna Inc. (MRNA - Free Report) and Qualcomm Incorporated (QCOM - Free Report) .

NVIDIA topped both earnings and revenue estimates and offered a bullish revenue outlook for the current quarter, thanks to the solid demand for its AI-enabled GPU chips. The AI chipmaker announced a 10-to-1 stock split, effective Jun 7, and increased its quarterly cash dividend by 150% to 10 cents per share (read: NVIDIA's Explosive Earnings: Should You Buy the Stock or ETFs Now?).

Per the latest survey from Bank of America, expectations of interest rate cuts rather than earnings optimism have made investors the "most bullish" since November 2021. About 82% of global fund managers expect the first rate cut by the Fed in the second half, while 78% say a recession is unlikely in the next 12 months.

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.

However, concerns over stubborn inflation once again might halt the rally in the Index. This is because the Fed minutes and upbeat manufacturing data, both of which highlight concerns over stubborn inflation, have again pushed back the timing of rate cuts.

While inflation has eased over the past year, it failed to show further progress toward the Fed’s 2% objective in recent months, per its latest minutes. As such, the disinflation process would likely take longer than previously thought. Meanwhile, U.S. business activity growth accelerated sharply to its fastest pace in more than two years in May after two months of slower growth led by an upturn in the service sector. The data indicates that the U.S. economy is back on course for another solid GDP gain in the second quarter. The strength in the economy could spark a revival in inflation.

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

QQQ in Focus

Invesco QQQ provides exposure to 101 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 $268.2 billion and an average daily volume of around 37 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: What's in the Cards for Nasdaq ETFs?).

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 130% and its earnings are expected to grow 93.7% in the fiscal year (ending January 2025).

NVIDIA makes up for 7.2% of the assets in QQQ and has a Zacks Rank #2 (Buy). It has a Growth Score of A. You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.

Constellation Energy generates and markets electricity. It sells natural gas, renewable energy and other energy-related products and services. The stock has risen 98% so far this year. It makes up 0.5% of the assets in the QQQ portfolio.

Constellation Energy has an expected earnings growth rate of 48.3% for this year and a Zacks Rank #3 (Hold).

Micron Technology has established itself as one of the leading worldwide providers of semiconductor memory solutions. The stock makes up for 1% of the assets in the QQQ portfolio.

Micron Technology has gained 55.5% and has an expected earnings growth rate of 11.9% for the fiscal year ending August 2024. It has a Zacks Rank #2 and a Growth Score of B (read: Here's Why These Tech ETFs Are Worth Buying Now).

Moderna is a commercial-stage pharmaceutical company primarily focused on discovering and developing messenger-RNA (mRNA) based therapies. The stock climbed 54% and accounts for 0.4% in the fund’s basket.

Moderna has an expected earnings growth rate of 39.4% for this year. It has a Zacks Rank #3.

Qualcomm designs, manufactures and markets digital wireless telecom products and services based on the Code Division Multiple Access technology. The stock has risen 47.3% so far this year.

Qualcomm has an estimated earnings growth of 17.1% for the fiscal year (ending Sep 2024) and accounts for a 1.6% share in QQQ. It has a Zacks Rank #3 and a Growth Score of B.

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