QQQ Wobbly as Big Tech Earnings Begin
The Invesco QQQ Trust ETF (QQQ) is in the spotlight this week as multiple big tech companies report quarterly earnings results.
The growth stock proxy started the week’s trading down nearly 8% from its July 10 peak but jumped 1% higher Monday morning as hopeful investors anticipated corporate earnings for QQQ top holdings Apple, Microsoft, Meta Platforms, and Amazon.
Those four stocks command more than 25% of QQQ’s allocation, as its cap-weighted benchmark index, the Nasdaq 100, is heavily tilted toward mega-cap tech stocks.
In what may be a preview to a volatile week, QQQ faltered in afternoon trading, relinquishing most of its morning gains.
Solid earnings reports from these Magnificent Seven companies would likely provide a big QQQ price boost, but a few misses might just as easily send the mega-cap growth exchange-traded fund in the opposite direction.
QQQ Top Holdings
Holding | Weight | YTD Return |
8.95% | 13.46% | |
8.47% | 13.49% | |
7.45% | 128.33% | |
5.09% | 20.11% | |
4.86% | 36.78% | |
4.35% | 31.85% | |
2.84% | -11.54% | |
2.63% | 19.69% | |
2.54% | 19.83% | |
2.51% | 24.37% | |
1.88% | 29.6% |
Data as of July 26, 2024. Past performance is no guarantee of future results.
Big Tech Earnings Estimates
This week is crucial for the tech industry, with several major tech giants releasing their earnings reports. Here is the consensus of earnings per share and forward growth expectations for key QQQ holdings, Apple, Microsoft, Meta Platforms, and Amazon, according to Yahoo Finance:
Apple (AAPL)
Earnings per share (EPS) estimate: $1.3
Revenue estimate: Strong growth expected
Microsoft (MSFT)
Earnings per share (EPS) estimate: $2.94
Revenue estimate: Solid growth anticipated
Meta Platforms (META)
Earnings per share (EPS) estimate: $4.3
Revenue estimate: Expectations for continued growth
Amazon (AMZN)
Earnings per share (EPS) estimate: $0.94
Revenue estimate: Growth expected, but slower compared to previous quarters
Bottom Line on QQQ and Corporate Earnings
Investors should note that corporate earnings estimates can vary from the actual reported results. Factors such as economic conditions, competition, product launches, and investor sentiment can affect a company's performance.
If these tech giants exceed expectations, it could boost investor confidence, leading to a broader market rally. Disappointing results from these companies could trigger a sell-off, affecting not only the tech sector and ETFs like QQQ but also the broader market.
Regardless of the outcome, earnings reports can increase market volatility as investors react to the news.