The recovery in the share prices of large
technology companies and the rally in top
chip stocks, including Nvidia (
NASDAQ:NVDA
) and Advanced Micro Devices (
NASDAQ:AMD
), have driven the Invesco QQQ Trust (
QQQ
) ETF (
Exchange-Traded fund) higher. Up about 31% year-to-date, QQQ recently crafted a new 52-week high of $349.24. Meanwhile, it has significantly outperformed the broader S&P 500 Index (
SPX
) by a wide margin. While QQQ has gained in value, analysts see further upside.
Lower valuation, significant cost-cutting measures, improving demand trends, and easing inflation have led to a recovery in tech stocks, pushing the QQQ ETF’s stock price higher. For instance, QQQ tracks the Nasdaq-100 index (
NDX
), and its
top five holdings, including Microsoft (
NASDAQ:MSFT
), Apple (
NASDAQ:AAPL
), Nvidia, Amazon (
NASDAQ:AMZN
), and Alphabet (
NASDAQ:GOOGL
) have delivered substantial gains in 2023. Refer to the image below for the weightage and performance of its top five holdings so far this year.
What’s the Prediction for QQQ ETF?
On TipRanks, the QQQ ETF has an
Outperform Smart Score of eight, suggesting it could continue to outperform the broader market averages. Moreover, the ETF has further upside potential based on the analysts' consensus view of nearly 2K ratings.
Per the recommendations of 1,719 analysts giving stock forecasts for the holdings of QQQ, the 12-month average
Invesco QQQ Trust ETF price target of $375.77 implies 7.85% upside potential from current levels. Also, the ETF sports a Moderate Buy consensus rating on TipRanks.
Among the analysts providing ratings on its holdings, 66.96% have given a Buy rating, 29.20% have assigned a Hold rating, and 3.84% have given a Sell rating.
Bottom Line
QQQ offers exposure to the top tech stocks with diversification, thus reducing your overall risk. Meanwhile, its market-beating returns, analysts’ optimistic outlook, and low expense ratio make it an attractive tech-focused ETF.
While QQQ has registered significant gains this year, it has
lagged behind this tech ETF.
Disclosure
The stock market is on a growth path, with the Nasdaq Composite index up 24% since Jan. 1. The market is benefiting from gradually easing inflation after countless stocks experienced steep declines amid an economic downturn last year. As many companies begin to recover, now is an
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