Friday marks the end of the second quarter and the completion of the first half of the year. This means now is the time for investors to reflect on what worked in the first six months and strategize for the second half. Some of those answers could be the same.
For example, as of June 27, the Nasdaq-100 Index (NDX) was higher by 17.9% year to date, an advantage of 220 basis points over the S&P 500. That’s good news for the Invesco QQQ Trust (QQQ) and the Invesco NASDAQ 100 ETF (QQQM), the popular NDX-tracking exchange traded funds.
Much of the bullishness accrued by QQQ and QQQM in the first half was attributable to Nvidia (NVDA) – the ETFs’ third-largest holding. As of June 27, shares of the semiconductor giant were up 150.37% year to date. The stock can continue soaring in the second half — or it could cool off. For investors considering QQQ and QQQM as second-half ideas, the good news is that some analysts believe other members of the ETFs’ rosters could be winners into year-end.
Not Nvidia, But Other NDX Names Could Shine
Rosenblatt Securities recently revealed its top 10 equity ideas for the second half of 2024. Nvidia didn’t make the cut, but several other QQQ/QQQM holdings did, including Advanced Micro Devices (AMD) and Apple (AAPL). Those two stocks combine for more than 10% of the QQQ/QQQM portfolios.
Rosenblatt analyst Hans Mosesmann is constructive on AMD not because the company can surpass rival Nvidia in terms of artificial intelligence (AI) chip market share, but because AMD can grab enough AI market share to propel the stock.
AMD can “possibly gaining accelerator share for the next couple of years, a better-than-expected MI3xx lineup entering 2025, continued CPU share gains (yes, there are a couple more years of this) vs. Intel, and a broader non-AI recovery exiting 2025,” wrote the analyst.
Rosenblatt’s Barton Crockett is constructive on Apple, the second-largest holding in the Invesco ETFs. The analyst has a $260 price target on the stock and views the recent iPhone 12 reboot as a catalyst.
“That drove a 39% pop in iPhone sales in F2021, as consumers rushed to transition to 5G capable devices. If AI smartphone adoption becomes a similar drive to platform switch, our new mid-teens AI iPhone fueled growth estimate for F2026E looks reasonable, after a slow acceleration in F2025E,” noted Crockett.
Micron Technology (MU) and Crowdstrike Holdings (CRWD), both of which are held by QQQ and QQQM, are also among Rosenblatt’s best ideas for the second half.
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