It’s the largest sector in a slew of basic broad market exchange traded funds and its 2022 slump is well-documented, so it’s easy to understand why investors remain captivated by technology.
Importantly, many retail investors remain fond of technology stocks and that ebullience extends to the likes of Google parent Alphabet (NASDAQ: GOOG), which is a member of the communication services sector. Add it all up and there’s potentially a case for an extended rebound for ETFs such as the Invesco QQQ Trust (QQQ) and the Invesco NASDAQ 100 ETF (QQQM).
Both Invesco ETFs are linked to the Nasdaq-100 Index (NDX), putting them front-and-center in discussions regarding recoveries by large- and mega-cap growth and technology stocks.
“Yet many of those stocks (Nasdaq-100 names) remain the most popular among individual investors who say they are confident in a rebound and expect the companies to continue powering the economy,” reports Gunjan Banjeri for the Wall Street Journal.
Investors revisiting shares of Alphabet, Amazon (NASDAQ: AMZN), and other marquee NDX components is, predictably, benefiting QQQ and QQQM. Over the past month, the two Invesco ETFs are higher 12.48%, confirming they’ve got some momentum on their sides.
“It has been a fruitful bet for many. Tech stocks have been on the rebound of late, partly on investor hopes for a slower path of interest-rate increases in the months ahead. The Nasdaq gained 12% in July, its best month since April 2020, outperforming the broader S&P 500, which rose 9.1%,” according to the Journal.
Among the other Nasdaq-100 components that remain popular among investors are Apple (NASDAQ: AAPL) and semiconductor giant Advanced Micro Devices (NASDAQ: AMD), which recently topped rival Intel (NASDAQ: INTC) in terms of market capitalization. Those two stocks combine for 14.57% of the rosters of QQQ and QQQM.
Further supporting QQQ and QQQM is the point that investors are backing some of the ETFs’ individual components despite gloomy macroeconomic commentary on recent quarterly earnings conference calls.
“Even last week when many of the industry’s leaders, including Apple, Amazon, and Alphabet, warned their growth is slowing, investors pushed the stocks higher and expressed confidence in the ability of the companies to withstand an uncertain economy. Apple logged its best month since August 2020, while Amazon finished its best month since October 2009, helped by a 10% jump in its shares on Friday alone,” concludes the Journal.
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The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.