Published on 29 May 2024 on Zacks via Yahoo Finance
Nasdaq Tops 17K: 5 Best-Performing Stocks in ETF YTD
The Nasdaq Composite Index hit a new record high, topping the 17,000 level for the first time ever. Solid corporate earnings and rate cut bets have been driving stocks higher. In particular, NVIDIA’s blockbuster earnings spread huge optimism into the stock market along with the global artificial intelligence (AI) boom. This led the Nasdaq to move further higher. The tech-heavy index has risen 13.4% so far this year.Invesco QQQ QQQ, which serves as a proxy to the Nasdaq Index, gained 12% in the year-to-date timeframe. As such, we have highlighted the five best-performing stocks of QQQ this year that led the way higher in the portfolio. These are NVIDIA Corporation NVDA, Constellation Energy Corporation CEG, Micron Technology MU, Moderna Inc. MRNA and Qualcomm Incorporated QCOM.NVIDIA topped both earnings and revenue estimates and offered a bullish revenue outlook for the current quarter, thanks to the solid demand for its AI-enabled GPU chips. The AI chipmaker announced a 10-to-1 stock split, effective Jun 7, and increased its quarterly cash dividend by 150% to 10 cents per share (read: NVIDIA's Explosive Earnings: Should You Buy the Stock or ETFs Now?).Per the latest survey from Bank of America, expectations of interest rate cuts rather than earnings optimism have made investors the "most bullish" since November 2021. About 82% of global fund managers expect the first rate cut by the Fed in the second half, while 78% say a recession is unlikely in the next 12 months.The expansion of AI applications holds the promise of ushering in fresh opportunities for growth in the tech sector and beyond. According to a new report by Grand View Research, the global artificial intelligence market is expected to witness a CAGR (2024-2030) of 36.6% to reach $811.75 billion by 2030.However, concerns over stubborn inflation once again might halt the rally in the Index. This is because the Fed minutes and upbeat manufacturing data, both of which highlight concerns over stubborn inflation, have again pushed back the timing of rate cuts.While inflation has eased over the past year, it failed to show further progress toward the Fed’s 2% objective in recent months, per its latest minutes. As such, the disinflation process would likely take longer than previously thought. Meanwhile, U.S. business activity growth accelerated sharply to its fastest pace in more than two years in May after two months of slower growth led by an upturn in the service sector. The data indicates that the U.S. economy is back on course for another solid GDP gain in the second quarter. The strength in the economy could spark a revival in inflation.Let’s take a closer look at the fundamentals of QQQ.
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