In December, Walmart (WMT) shifted its stock listing to the Nasdaq Global Select Market after five decades on the New York Stock Exchange (NYSE). This resonates Walmart’s increasingly emphasis on e-commerce and technology. In January, the stock joined the Nasdaq 100 Index (NDX), making it eligible for inclusion in the Invesco QQQ Trust (QQQ) and the Invesco NASDAQ 100 ETF (QQQM), both of which track that benchmark.
Perhaps surprising to some investors, Walmart was those ETFs’ ninth-largest holding entering the Feb. 3 trading session, accounting for 3.18% of those funds’ rosters.
Walmart Joining QQQ Members in Another Way
QQQ and QQQM are cap-weighted ETFs, meaning the stocks with the biggest market value command the most significant percentages of the funds’ portfolios. On that note, Walmart achieved a feat previously accomplished by a small number of other stocks, including some marquee QQQ/QQQM holdings: The retail giant joined the $1 trillion market cap club. Hence its prominence in the Invesco ETFs.
“The retailer’s inclusion in a group heavy on tech companies illustrates much about its ambitions. Walmart has tried to grow profits faster than sales in recent years by leaning into its third-party marketplace and advertising businesses — both of which bring higher margins than its traditional brick-and-mortar operations,” reports Jacob Pramuk for CNBC.
Under any circumstances, a company joining the $1 trillion club is noteworthy. It’s especially so with Walmart because John Furner recently took over as chief executive officer. The stock’s recent ascent confirms Wall Street and retail investors are comfortable with Furner at the helm.
“As CEO of Walmart’s U.S. business, Furner oversaw many of the key initiatives that drove the retailer’s growth in recent years. Efforts like curbside pickup and better private-label brands helped the discounter draw higher-income shoppers as elevated inflation bit into grocery budgets,” according to CNBC.
QQQ and QQQM will continue being viewed through the lens of technology. Still, if that sector incurs volatility, the ETFs’ Walmart exposure may be able to smooth those bumps. The retailer reports fourth-quarter results later this month and that could be a catalyst for the stock, assuming bullish forward-looking guidance is part of that update.
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