QQQ Wobbly as Big Tech Earnings Begin

Kent Thune

Research Lead

Jul 30, 2024

Reviewed by: etf.com Staff

Edited by: James Rubin

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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
Apple Inc. (AAPL)	8.95%	13.46%
Microsoft Corp (MSFT)	8.47%	13.49%
Nvidia Corp (NVDA)	7.45%	128.33%
Amazon.com Inc (AMZN)	5.09%	20.11%
Broadcom Inc (AVGO)	4.86%	36.78%
Meta Platforms Inc Class A (META)	4.35%	31.85%
Tesla Inc (TSLA)	2.84%	-11.54%
Alphabet Inc Class A (GOOGL)	2.63%	19.69%
Alphabet Inc Class B (GOOG)	2.54%	19.83%
Costco Wholesale Corp (COST)	2.51%	24.37%
Netflix, Inc. (NFLX)	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.

Kent Thune

| Contact: [email protected]

Kent Thune is Research Lead for etf.com, focusing on educational content, thought leadership, content management and search engine optimization. Before joining etf.com, he wrote for numerous investment websites, including Seeking Alpha and Kiplinger.

Kent holds a Master of Business Administration (MBA) degree and is a practicing Certified Financial Planner (CFP®) with 25 years of experience managing investments, guiding clients through some of the worst economic and market environments in U.S. history. He has also served as an adjunct professor, teaching classes for The College of Charleston and Trident Technical College on the topics of retirement planning, business finance, and entrepreneurship.

Kent founded a registered investment advisory firm in 2006 and is based in Hilton Head Island, SC, where he lives with his wife and two sons. Outside of work, Kent enjoys spending time with his family, playing guitar, and working on his philosophy book, which he plans to publish in the coming year.

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