The Nasdaq Composite Index had a strong performance in the first half of 2024, gaining approximately 18%. This growth was fueled by the artificial intelligence (AI) craze, expectations of rate cuts, and the increasing share of the “Magnificent Seven” companies driving the market higher.
Invesco QQQ, which tracks the Nasdaq Index, saw a 17% increase in the year-to-date timeframe. Among the top-performing stocks in QQQ this year were NVIDIA Corporation, Arm Holdings Limited, Constellation Energy Corporation, Micron Technology, and Broadcom.
The tech sector saw significant gains, with companies like NVIDIA, Microsoft, Amazon, Meta Platforms, and Apple leading the way. NVIDIA alone contributed to 31% of the market’s first-half advance, with companies racing to become the world’s most valuable company on the back of AI capabilities.
The AI boom is expected to continue driving growth in the sector, with companies investing heavily in this technology. According to a report by Grand View Research, the global artificial intelligence market is projected to reach $811.75 billion by 2030, with a compound annual growth rate of 36.6%.
The Federal Reserve indicated a potential rate cut for this year and forecasted four cuts in 2025. This could lead to a period of higher interest rates, benefiting tech companies. When the Fed starts cutting rates, technology stocks are likely to receive a boost as borrowing becomes cheaper for further initiatives.
Invesco QQQ offers exposure to the 102 largest non-financial companies listed on the Nasdaq, with a focus on information technology and consumer discretionary sectors. With an AUM of $288.2 billion and an average daily volume of around 32 million shares, Invesco QQQ is one of the largest and most popular ETFs in the large-cap space.
The top-performing stocks in QQQ include NVIDIA, Arm Holdings, Constellation Energy, Micron Technology, and Broadcom. These companies have shown significant growth in the first half of the year, with strong expected earnings growth rates and favorable rankings.
Overall, the tech sector continues to show resilience and promising growth prospects, driven by AI advancements and favorable market conditions.