When most investors think of the best tech stocks, they think of the biggest names in the sector. That makes sense – those hefty market values are the result of strong performances.
As a result, when those market participants think of the ETFs that are homes to many of the best tech stocks, their thoughts often drift to the Invesco NASDAQ 100 ETF (QQQM) and the Invesco QQQ Trust (QQQ), among others. However, the Invesco NASDAQ Next Gen 100 ETF (QQQJ) has something to say in the best tech stock conversation.
The $883.64 million QQQJ turned five years old last October. It follows an index that’s basically the proving ground for future admittance to the Nasdaq-100 Index (NDX). So the bulk of QQQJ’s roster is comprised of either mid-cap stocks or smaller large-caps. The stocks are highlighted by a weighted average market capitalization of $23.88 billion for the ETF’s 107 holdings.
Some Cream of the Tech Crop Found in QQQJ
“Best” may be a subjective word to some investors, but it’s clear QQQJ is home to some of the stocks Morningstar considers to be top tech names to own. That list includes Fiserv (FISV), which QQQJ’s fifth-largest holding.
“Fiserv is a leading provider of core processing and complementary services, such as electronic funds transfer, payment processing, and loan processing, for US banks and credit unions, with a focus on small and midsize banks. The firm earns a narrow moat rating, and the shares of its stock look 47% undervalued relative to our $126 fair value estimate,” said Morningstar’s Tori Brovet.
Another QQQJ member that makes the cut among the top tech stocks to own is Akamai Technologies (AKAM). Akamai Technologies is a network gear company with expanding footprints in high-growth industries such as cybersecurity and edge computing. Morningstar said the narrow moat company is undervalued.
“More recently, Akamai began investing in its cloud computing business. Through its 2022 acquisition of Linode, a developer-friendly cloud infrastructure business, Akamai has extended its dense, distributed network to capitalize on the growing demand for cloud computing,” noted analyst Mark Giarelli. “Although competition will remain stiff, particularly as it goes up against the major hyperscalers, we think Akamai’s differentiated and distributed network, with over 4,300 points of presence, will allow the firm to capitalize on the growing demand for edge computing.”
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