The Invesco QQQ Trust (QQQ) and the Invesco NASDAQ 100 ETF (QQQM) both follow the Nasdaq-100 Index (NDX). That means they’re passive ETFs. But among the myriad uses of these products is the ability to access a basket of large-cap growth stocks. And many of those are popular with active managers.
Owing to the fact that large/mega-cap growth stocks outperformed the broader market for an extended period of time prior to a 2025 pullback, it’s not surprising active managers feasted on stocks such as Alphabet (GOOG), Amazon (AMZN), and Microsoft (MSFT) in an effort to beat their benchmarks.
In what could be good news for the recently resurgent QQQ and QQQM, data indicates some of the top-performing active managers took advantage of first-quarter retrenchment in mega-cap growth stocks to add to those names, including the three aforementioned stocks as well as Nvidia (NVDA).
Active Managers Buying QQQ Names
Morningstar recently scoured the universe of medalist large-cap active funds that hold 50 or fewer stocks to examine some of the most popular first-quarter buys among those managers. Alphabet, Microsoft, Amazon, and Nvidia all appear on the top-10 list. That’s pertinent to QQQ/QQQM investors because those ETFs allocate about 28% of their rosters to that quartet of stocks.
As recent earnings reports suggest, the fundamental outlooks for those marquee QQQ/QQQM holdings remains sturdy. Consider Microsoft and the growth of its Azure cloud computing unit.
“Demand for Azure AI services is surging, which is a long-term positive. While Azure remains capacity-constrained, AI performed better than internal expectations, while traditional workloads rebounded. Azure growth was 35% in constant currency for the quarter and topped guidance,” noted Morningstar analyst Dan Romanoff.
Amazon, the largest consumer discretionary holding in QQQ and QQQM, has struggled this year due in large part to the volatility surrounding U.S./China trade relations. But with some progress made on that front, the stock is higher by more than 16% over the past month. Down 8.33% YTD, Amazon as viewed as one of the “value” ideas among the Magnificent Seven.
More importantly, Amazon shoppers haven’t dramatically altered their habits amid the specter of tariffs. That indicates the stock may have overreacted to those headlines.
“Amazon produced upside to revenue in each of the segments relative to our model, except for third-party sellers, which was slightly light. Consumer buying behavior has not really changed in the face of tariffs, even through April. Advertising was impressive and helped buoy overall results,” added Romanoff.
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