The Nasdaq-100 Index (NDX) is often viewed as “tech territory.” It’s home to — and at substantial weights — Microsoft (MSFT), Nvidia (NVDA), Apple (AAPL), and Alphabet (GOOG), among others. Those are among the stocks that keep plenty of eyeballs on NDX and ETFs such as the Invesco QQQ Trust (QQQ) and the Invesco NASDAQ 100 ETF (QQQM).
However, those ETFs hold 101 stocks. That means there are other names that can drive upside for these funds beyond the “Magnificent Seven.” Those two ETFs track the NDX. They allocate nearly 51% of their respective weights to tech stocks. But some of the stocks residing in these funds with the most upside to analyst price targets hail from other sectors.
The ‘Others’ in QQQ, QQQM Could Be Ready to Shine
Further down the list of QQQ/QQQM sector exposures, investors will find a 6.26% allocation to healthcare stocks. That’s dwarfed by the ETFs’ tech weigh, but it’s still relevant. That’s because some of those holdings could be undervalued relative to Wall Street price forecasts. Such names include biotech companies Biogen (BIIB) and Moderna (MRNA).
Between those two, the average upside to analyst price targets is about 40%. AstraZeneca PLC (AZN), another QQQ healthcare component, resides about 26% below the Wall Street consensus price estimate. Baker Hughes (BKR) is another name with considerable upside potential. Its one of just two energy stocks found in QQQ and QQQM,
“Bank of America last month reiterated its buy rating on Baker Hughes. The firm slightly lowered its price target on the stock by $1.50 to $37.50. Twenty-two of the 27 analysts polled by LSEG rate the stock a buy or strong buy, and the average price target suggests 35% upside from here,” reported Pia Singh for CNBC.
The two Invesco ETFs allocate 13.61% of their rosters to consumer discretionary stocks, with Amazon (AMZN) and Tesla (TSLA) representing the bulk of that exposure. Further down that list are some other names that could be contributors of upside for the ETFs as 2024 moves forward.
Those include MercadoLibre (MELI), which is comparable to Amazon in Latin America, and Chinese e-commerce giant PDD Holdings (PDD). As reported by CNBC, those stocks reside 23.5% and 36.7% below analysts’ consensus price targets, respectively.
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