This ETF Is Down 7% From Its High. History Says Now Is a Smart Time to Invest.
2026-07-25 15:30
•Stefon Walters •The Motley Fool
•••• ••••••••• Axe Capital view
Tech Pullback on Nasdaq 100: A Buying Opportunity or Trap?
The recent 7% drop in QQQM may signal a chance to buy, especially ahead of a likely rotation back to mega-cap tech stocks.
The Invesco Nasdaq 100 ETF (QQQM) fell 7% from its June high, which looks like a setback but actually aligns with historical patterns of healthy tech corrections. The long-term returns of this ETF hover around 14% annually, indicating resilience despite volatility. Year-to-date, QQQM is still up over 12%, driven heavily by chipmakers like Micron and AMD, which have seen massive gains. However, these cyclical semiconductor stocks can be fickle. The mega-cap tech giants—Apple, Microsoft, Amazon, Meta, Tesla—make up most of the ETF’s blue-chip base and are showing signs of being undervalued after their recent underperformance. For us in South Africa, the best direct tech exposure is through Naspers and especially Prosus, which tracks global internet and tech trends closely. The rand’s strength or weakness against the dollar (USD/ZAR) will amplify returns or risk in these shares. If the dollar strengthens or US inflation accelerates, this could put pressure on the rand and dampen local tech profits. Still, I see the fever for cyclical chips cooling, paving the way for mega-cap tech’s return. this is just my opinion and not financial advice
I would watch the rand-dollar pair closely and buy Prosus on dips, as it reflects the large-cap tech rebound. Avoid semiconductor plays locally and trim any small holdings in tech cyclicals. Favor quality and patience.
- Prosus
- USD/ZAR
- Renewed semiconductor strength prolonging rotation away from mega-cap tech
- Stronger US dollar hurting rand-based returns
7/10
The Invesco Nasdaq 100 ETF (QQQM) has declined 7% from its June high but remains up 12.7% year-to-date. The article argues this pullback presents a buying opportunity, citing the ETF's strong long-term track record of ~14% annual returns since inception. With tech stocks comprising 68.5% of holdings, the author suggests investors may eventually rotate back to mega-cap tech companies for stability after recent outperformance in cyclical semiconductor and memory stocks.
This article was originally published by The Motley Fool and has been adapted here for Axe Capital Trading News.
Publisher: The Motley Fool
Author: Stefon Walters
Categories: Technology, AI, Semiconductors, Equities
Tickers: QQQM, AAPL, MSFT, NVDA, MU, AMD, AMZN, META, TSLA
Sentiment: Positive - Despite a 7% pullback from highs, the article presents this as a buying opportunity based on strong historical performance (~14% annual returns), solid year-to-date gains (12.7%), and the author's expectation of future rotation back to mega-cap tech holdings. Apple is mentioned as a top holding in QQQM (7.77%) and as part of the 'Magnificent Seven' that is currently underperforming. The article suggests these mega-cap stocks may see renewed investor interest in the future.
Keywords: QQQM, Nasdaq 100, ETF, tech stocks, market pullback, long-term investing, Magnificent Seven, semiconductor stocks
Insights:
- QQQM: Positive: Despite a 7% pullback from highs, the article presents this as a buying opportunity based on strong historical performance (~14% annual returns), solid year-to-date gains (12.7%), and the author's expectation of future rotation back to mega-cap tech holdings.
- AAPL: Neutral: Apple is mentioned as a top holding in QQQM (7.77%) and as part of the 'Magnificent Seven' that is currently underperforming. The article suggests these mega-cap stocks may see renewed investor interest in the future.
- MSFT: Neutral: Listed as a Magnificent Seven stock currently underperforming the market, but expected to benefit from future investor rotation back to mega-cap tech for stability.