In the latest stock market rally, Invesco QQQ (QQQ - Free Report) , which tracks the Nasdaq 100 Index, joined the $100 billion club of AUM last week. The fund has gathered $9.8 billion in its asset base so far this year and is the fifth largest ETF, behind SPDR S&P 500 ETF Trust (SPY - Free Report) , iShares Core S&P 500 ETF (IVV - Free Report) , Vanguard Total Stock Market ETF (VTI - Free Report) and Vanguard S&P 500 ETF VOO.
Its popularity can be attributed to surging technology and communication services equities triggered by higher demand for work and play indoors due to the coronavirus pandemic. Information technology makes up for 47.2% share in the basket while communication services takes 20.4% allocation. Consumer discretionary holds 16.4% of the assets in QQQ. Notably, discretionary stocks are also on the move with boost in online shopping (read: ETFs to Tap on Soaring E-Commerce Sales Amid Coronavirus).
In fact, QQQ has outperformed this year so far, having gained 4.6% while SPY and IVV lost nearly 11% each. VTI and VOO were also down 12.2% and 11.1%, respectively. CFRA finds many of the stocks in the ETF to be attractively valued and have underappreciated earnings potential. QQQ trades in average daily volume of more than 47 million shares and charges investors 20 bps in annual fees. The fund is home to 104 stocks and has a Zacks ETF Rank #1 (Strong Buy) with a Medium risk outlook.
Though most of the stocks in the fund’s portfolio have delivered strong returns so far this year, a few were the real stars, having gained in double digits. Below we have highlighted 10 best-performing stocks in the ETF with their respective positions in the fund’s basket:
Top-Performing Stocks in QQQ
Zoom Video Communications Inc. ZM: It provides a video-first communications platform in the Americas, the Asia Pacific, Europe, the Middle East, and Africa. The stock has skyrocketed 146.8% this year so far and accounts for 0.2% in the fund’s basket. It has an expected earnings growth rate of 22.9% for the fiscal year (ending January 2021) and a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.
Tesla Inc. (TSLA - Free Report) : This company designs, produces and sells electric cars, solar energy generation systems and energy storage product. The stock has surged nearly 92% this year so far and has 1.6% exposure in the fund’s basket. It has an expected earnings growth rate of 3430.8% and has a Zacks Rank #3 (Hold).
DexCom Inc. (DXCM - Free Report) : This medical device company is focused on the design, development and commercialization of continuous glucose monitoring systems. DexCom has risen 84.2% so far this year and makes up for 0.4% share of the basket. It has an estimated earnings growth rate of 21.2% and a Zacks Rank #2.
Regeneron Pharmaceuticals Inc. (REGN - Free Report) : This biopharmaceutical company is focused on the discovery, development and commercialization of treatments targeting serious medical conditions. It has gained 52% so far this year and has an estimated earnings growth rate of 11.6%. The stock accounst for 0.7% of assets in QQQ and has a Zacks Rank #3.
Seattle Genetics Inc. (SGEN - Free Report) : This biotechnology company is primarily focused on developing and commercializing therapies targeted for the treatment of cancer. It has gained 40.1% this year so far and accounts for 0.3% share. The stock has a Zacks Rank #2 (read: Biotech ETFs to Gain From Latest Advancements in Cancer Drugs).
JD.com Inc. (JD - Free Report) : It operates as an online direct sales company in China. The company has an expected earnings growth rate of 18.7% and its shares have jumped 38.9% this year so far. It carries a Zacks Rank #3 and accounts for 0.5% share.
Netflix Inc. (NFLX - Free Report) : This is a provider of Internet television (streaming services) and DVD-rental services. It has gained 36.6% this year and has an estimated earnings growth rate of 55.9% for this year. The stock has a Zacks Rank #2 and makes up for 2.1% allocation (read: Stay-at-Home Boosts Netflix Q1 Subscribers: ETFs to Buy).
NVIDIA Corporation NVDA: It is the worldwide leader in visual computing technologies and the inventor of the graphic processing unit, or GPU. The stock has projected earnings growth rate of 28.7% for fiscal year (ending Jan 2021) and rallied 36.5% this year so far. It accounts for 2.1% of the fund portfolio and has a Zacks Rank #2.
MercadoLibre Inc. (MELI - Free Report) : This is one of the largest e-commerce platforms in Latin America. The stock has climbed 35.9% this year so far and has an expected earnings growth rate of 62.5%. MercadoLibre has a Zacks Rank #2 and accounts for 0.4% of the fund.
PayPal Holdings Inc. (PYPL - Free Report) : This company is one of the largest online payment solutions providers. It has an expected earnings growth of 7.1% for this year and has a Zacks Rank #3. PayPal makes up for 1.8% allocation and has delivered robust returns of 33.5% this year so far.
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