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Further Reading from MarketBeat.com As Tech Earnings Grow, This ETF Still Hasn't Caught UpSubmitted by Jessica Mitacek. Originally Published: 3/26/2026. 
Key Points - Despite strong earnings growth and record revenue driven by AI demand, the tech sector is down nearly 5% year-to-date, creating a disconnect between company health and share prices.
- The QQQM is trading in a tight range and approaching oversold territory, offering investors an entry point before tech stock prices catch up to their financial performances.
- While mega-cap Mag 7 stocks have struggled recently, QQQM’s exposure to steady performers in consumer staples and communication services has helped offset tech-sector volatility.
- Special Report: Elon's "Hidden" Company
Despite the tech sector’s struggles this year, the companies that make up that corner of the market continue to show strong financials. Driven by intensifying demand for artificial intelligence (AI), tech firms—particularly those in the Magnificent Seven—have posted strong earnings growth, record revenue and guidance that signals confidence from management teams across cloud computing, cybersecurity, fintech and semiconductors. America's leading gold expert is pointing to April 15, 2026 as a critical date for gold investors - and says a major shift in the gold market could be set to unfold. Whether you own gold, are considering buying, or simply follow the market, this forecast deserves your attention before that date arrives. Read the full urgent briefing and prepare for April 15 Although investors have rotated out of tech since Q4 2025, analysts continue to raise their earnings forecasts for 2026, and Q1 results in many cases easily exceeded Wall Street’s expectations. Stock prices, however, have yet to catch up with that earnings growth. As a whole, the tech sector is down nearly 5% year-to-date (YTD), making it the fourth-worst performer among the S&P 500’s 11 sectors. On an individual basis, the picture is starker. Microsoft (NASDAQ: MSFT), for example, has fallen more than 20% YTD—the worst showing among the Magnificent Seven, even though all those stocks are in the red in 2026. Tech is approaching oversold territory; once it bottoms and reverses, shares could begin to close the gap with those stronger fundamentals. For now, that makes exchange-traded funds (ETFs) that track the tech sector—like the Invesco NASDAQ 100 ETF (NASDAQ: QQQM)—a compelling way to position ahead of a potential rebound. Despite Earnings Growth, QQQM Has Been Mostly Flat Reflecting the performance of the tech giants in its portfolio, QQQM is down nearly 5% YTD. Despite a gain of more than 19% over the past year, the fund has traded in a tight range since early September 2025. Meanwhile, many of those tech giants have reported blowout earnings. Whether due to valuation concerns or fears of an AI bubble, the market has repeatedly reacted negatively to otherwise strong results. But investor sentiment does not change income statements. Take NVIDIA—the largest holding in QQQM with a current weighting of 8.80%—which, despite a YTD decline of more than 7%, is showing no signs of slowing. Looking at the fund’s top holdings, four of the companies delivered sizable quarterly earnings-per-share (EPS) growth, listed here in order of current weighting: The only exception among the largest holdings is Tesla (NASDAQ: TSLA), which reports Q1 earnings on April 28. By extension, one could argue QQQM is merely biding its time before breaking out of its range. Institutional owners may have anticipated that: although institutional selling rose to $1.84 billion in Q4 2025, it was outpaced by $3.09 billion in institutional buying, suggesting smart money used the sell-off to add shares. Outside of the Mag 7, QQQM Holds a Mix of Outperformers and Underperformers The YTD losses among the mega-cap Magnificent Seven have muted many of the standout performances from stocks further down QQQM's roster. Micron (NASDAQ: MU), the ETF’s 11th-largest holding at a 2.53% weighting and one of its strongest performers this year, has continued to exceed investors’ expectations following a near 217% gain in 2025. Similarly, semiconductor equipment maker Applied Materials (NASDAQ: AMAT), with a 1.50% weighting, has also delivered an impressive run this year after gaining 54% in 2025. By and large, however, the ETF is tilted toward mega-cap tech names that have lagged since the start of Q4. In addition to the beaten-up Magnificent Seven, QQQM has been weighed down by underperformance from Palantir (NASDAQ: PLTR) and Broadcom (NASDAQ: AVGO), both of which have trailed the S&P 500 this year. Still, while the fund has a significant tech concentration (nearly 47% of its portfolio), it also holds well-known names in sectors that have performed better in 2026. Consumer staples comprise more than 8% of the fund and are the fifth-best performer in the S&P this year. Walmart (NYSE: WMT) and Costco (NASDAQ: COST) represent 3.24% and 2.36% of the ETF’s portfolio, respectively, and have been notable contributors as defensive, high-quality retailers have held up better than many growth names. Communication services account for another 14.6% of QQQM, while consumer discretionary adds 13.4%. So, while investors wait for tech’s rebound, the fund’s often-overlooked diversification provides built-in hedges that have helped offset the larger positions’ YTD losses. | 
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