The PowerShares QQQ (NasdaqGM: QQQ), which tracks the tech heavy Nasdaq-100 Index, is dealing with the recent pullback in the FAANG stocks, but the widely followed exchange traded fund is higher by 18.5% year-to-date and still resides near record highs.
Those points could be signs that QQQ and the Nasdaq Composite can deal with the recent setbacks and continue moving higher as 2017 rolls along.
“However, if we look at the NASDAQ from 60,000 feet, we see a much more encouraging picture. The narrow view says ‘tech stocks’ have gone up for years and may be in a bubble,” according to ETF Daily News. “The longer-term view says, ‘the NASDAQ was able to make it back to the highs made in 2000, and recently broke out of a 20-year period of consolidation.’”
However, with technology’s ascent and that of QQQ, come concerns that the Nasdaq-100 is too heavily exposed to a small number of stocks. Additionally, some analysts opine that the benchmark’s significant technology overweight leaves it vulnerable should tech stocks fall out of favor.