ETFs
5 Best Performing Stocks in the ETF Year-To-Date
The Nasdaq Composite Index hit a new record high, surpassing the 17,000 level for the first time. Strong corporate earnings and expectations of lower rates sent stocks higher. In particular, NVIDIA’s blockbuster earnings have sparked enormous optimism in the stock market, alongside the global boom in artificial intelligence (AI). This led the Nasdaq to advance even further. The tech-heavy index is up 13.4% so far this year.
Invesco QQQ QQQ, which serves as a proxy for the Nasdaq index, gained 12% during the cumulative period. As such, we’ve highlighted the five best-performing QQQ stocks this year, which have led the way higher in the portfolio. These are NVIDIA Company NVDA, Constellation Energy Company CEG, Micron technology MU, Moderna inc. mRNA and Qualcomm incorporated QCOM.
NVIDIA beat earnings and revenue estimates and offered a bullish revenue outlook for the current quarter, thanks to solid demand for its AI-enabled GPU chips. The AI chipmaker announced a 10-for-1 stock split, effective June 7, and increased its quarterly cash dividend by 150% to 10 cents per share (read: NVIDIA’s Explosive Earnings: Should You buy stocks or ETFs now?).
According to the latest Bank of America survey, expectations of lower interest rates rather than earnings optimism have made investors the “most optimistic” since November 2021. Around 82% of global fund managers are expect a first rate cut from the Fed in the second half of the year, while 78% say a recession is unlikely over the next 12 months.
The expansion of AI applications promises to pave the way for new growth opportunities in the technology sector and beyond. The global artificial intelligence market is expected to witness a CAGR (2024-2030) of 36.6% to reach $811.75 billion by 2030, according to a new report from Grand View Research.
However, concerns over persistent inflation could halt the index’s rise again. Indeed, the Fed minutes and upbeat manufacturing data, both of which highlight concerns about stubborn inflation, have once again pushed back the timetable for rate cuts.
Although inflation has eased over the past year, it has failed to show further progress toward the Fed’s 2% target in recent months, according to its latest minutes. The disinflation process will therefore likely take longer than previously thought. At the same time, growth in U.S. business activity accelerated sharply to its fastest pace in more than two years in May, following two months of slower growth, driven by a recovery in the sector services. The data indicates that the U.S. economy is once again on track for another solid increase in GDP in the second quarter. The strength of the economy could trigger a resurgence in inflation.
Let’s take a closer look at the fundamentals of QQQ.
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QQQ in brief
Invesco QQQ provides exposure to the 101 largest domestic and international non-financial companies listed on Nasdaq. Information technology represents 58.9% of assets, while consumer discretionary represents 17.9%.
Invesco QQQ is one of the largest and most popular ETFs in the large-cap space, with $268.2 billion in assets under management and an average daily volume of approximately 37 million shares. Invesco QQQ charges investors 20 basis points in annual fees and has a Zacks ETF Rank #2 (Buy) with a Medium Risk Outlook (read: What’s in the Nasdaq ETF Charts?).
Below, we’ve highlighted the five stocks mentioned above in the ETF with their respective positions in the fund’s basket.
QQQ Best Performing Stocks
Nvidia is the world leader in visual computing technologies and the inventor of the graphics processing unit or GPU. The stock is up 130% and its earnings are expected to grow 93.7% over the fiscal year (ending January 2025).
NVIDIA represents 7.2% of QQQ’s assets and has a Zacks Rank #2 (Buy). It has a growth score of A. You can see the complete list of today’s Zacks Rank #1 (Strong Buy) stocks here.
Constellation Energy produces and markets electricity. It sells natural gas, renewable energy and other energy-related products and services. The stock is up 98% so far this year. It represents 0.5% of the assets of 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 world’s leading providers of semiconductor memory solutions. The stock represents 1% of the assets of 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.
Modern is a commercial-stage pharmaceutical company primarily focused on the discovery and development of messenger RNA (mRNA)-based therapeutics. The stock climbs 54% and represents 0.4% in the fund basket.
Moderna forecasts an earnings growth rate of 39.4% for this year. He has a Zacks Rank #3.
Qualcomm designs, manufactures and markets digital wireless telecommunications products and services based on code division multiple access technology. The stock is up 47.3% so far this year.
Qualcomm has an estimated earnings growth of 17.1% for the fiscal year (ending September 2024) and represents a 1.6% share in QQQ. It has a Zacks Rank #3 and a Growth Score of B.
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QUALCOMM Incorporated (QCOM): Free Inventory Analysis Report
Constellation Energy Corporation (CEG): Free Stock Analysis Report
Micron Technology, Inc. (MU): Free Stock Analysis Report
NVIDIA Corporation (NVDA): Free Stock Analysis Report
Moderna, Inc. (MRNA): Free Stock Analysis Report
Invesco QQQ (QQQ): ETF Research Reports