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Right now, there is a lot of uncertainty in the stock market. While stocks have bounced off their recent lows, the major market indices are still well off their highs and prone to volatility. Technology stocks, which had led the market higher in the past few years, have particularly struggled in recent months.
Much of this stems from fears about the economy and the current on-again, off-again tariffs and potential trade wars. In addition, there is some concern that artificial intelligence (AI) infrastructure spending could begin to cool in coming years, which has impacted tech stocks. For example, there have been reports that Microsoft is pulling back on some data center projects. However, its data center capital expenditures (capex) are still on the rise this year, and others are also spending big.
Despite the recent dip in tech stock prices, the sector has still been one of the best places to invest over the past decade. Today, tech companies have grown to become some of the largest companies in the world. In fact, eight of the top 10 stocks by market cap in the S&P 500 (SNPINDEX: ^GSPC) are classified as technology stocks, or they have very large tech components to them.
For investors looking to take advantage of this dip in tech stocks, there is one great exchange-traded fund (ETF) to buy: the Invesco QQQ ETF (NASDAQ: QQQ).
A long track record of outperformance
The Invesco QQQ ETF tracks the performance of the Nasdaq-100 index, which consists of the 100 largest nonfinancial stocks on the Nasdaq exchange. The index, and thus ETF, is heavily weighted toward growth, and in particular, tech stocks.
At the end of 2024, nearly 60% of the ETF's holdings were in the technology sector. However, some large companies with large tech components get grouped into other sectors. Amazon and Tesla, for example, are classified as consumer discretionary stocks. Amazon operates the largest cloud computing business in the world, and this segment makes up the bulk of its profits, so it is every bit a technology company as it is a retailer.
Here is a list of the Invesco QQQ ETF's top holdings and their weightings as of March 26, 2025:
| Holding | Weighting |
| Holding | Weighting |
|---|---|---|---|---|
| 1. Apple | 9.1% |
| 6. Broadcom | 3.8% |
| 2. Microsoft | 7.9% |
| 7. Meta Platforms | 3.6% |
| 3. Nvidia | 7.6% |
| 8. Netflix | 2.8% |
| 4. Amazon | 5.8% |
| 9. Costco Wholesale | 2.8% |
| 5. Alphabet | 5.1% |
| 10. Tesla | 2.7% |
Data source: Invesco.
This weighting toward tech and growth stocks has helped lead the ETF to a strong performance over the years. As of the end of February, the ETF has generated a cumulative return of 407.4% over the past 10 years. That easily surpasses the 238.8% return of the S&P 500 over the same period. Meanwhile, the ETF has outperformed the S&P 500 over 12-month rolling monthly periods 87% of the time over the past decade, and 84% of the time in the last five years.