The Nasdaq 100 Index (NDX) delivered another impressive showing in 2024, made possible thanks to contributions from some familiar names — mostly courtesy of the Magnificent Seven stocks.
That scenario benefited the Invesco QQQ Trust (QQQ) and the Invesco NASDAQ 100 ETF (QQQM) — the marquee exchange traded funds tracking NDX. With a new year arriving, time will tell if the Magnificent Seven will repeat 2024 bullishness, to what extent, and how many of those seven beloved stocks will make contributions to NDX upside.
The prevailing wisdom is that 2025 will be another good year for mega-cap growth stocks, but as experienced investors know, performances won’t be uniform across the space. With that in mind, some experts are highlighting opportunities among various QQQ/QQQM member firms, including Amazon (AMZN) and Facebook parent Meta Platforms (META).
Amazon, Meta Matter for QQQ Investors
Amazon and Meta are highly relevant in the QQQ/QQQM equation because the stocks are the ETFs’ largest consumer discretionary and communication services holdings, respectively. The duo combine for over 9% of the ETFs’ rosters.
Both companies outpaced NDX in 2024, and the extent to which they did could make asking for repeats in 2025 demanding. However, both are catalyst-rich stories with ample levers for upside in the new year. Take the case of Amazon and its bolstered artificial intelligence (AI) efforts.
“It isn’t cheap for Amazon, or any other company for that matter, to grow their AI initiatives. On Oct. 31, Amazon reported third-quarter capital expenditures of $22.6 billion, up from $12.5 billion in the previous year. Most of that spending is meant to support the growing need for technology infrastructure, primarily relating to the cloud-computing platform Amazon Web Services, as the company puts money into meeting demand for AI,” reported Angela Palumbo for Barron’s.
Meta performed even better in 2024. With one trading day left in the year, the stock was up 67% year-to-date. The company has its own burgeoning AI portfolio, but that risk is somewhat augmented by its strong social media assets and its dominance in the internet advertising space. Those could be contributors to 2025 upside for the shares.
“Meta shares have jumped over excitement for both AI and virtual reality projects. The company has also seen an increase in daily active users for its family of apps, including Instagram and Whats App. That’s important for advertising dollars, the company’s largest source of revenue,” according to Barron’s.
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