After spending more than three months mired in a slump, the Magnificent Seven stocks have roared back. What appears to be more clarity and progress in the White House’s international trade policy has been a boon for a group of stocks that have significant exposure to markets outside the U.S.
Given that each of the Magnificent Seven stocks are found among the top 10 holdings in the S&P 500, finding ETFs with big weights to these beloved names isn’t difficult. However, the wide following of these mega-cap growth names by market participants prompted the creation of dedicated ETFs. One such ETF is the Invesco Top QQQ ETF (QBIG).
QBIG holds each of the Magnificent stocks, along with Broadcom (AVGO) — the semiconductor giant that’s adjacent to that group. In recent weeks, that roster has paid off, as highlighted by QBIG’s 16% gain for the month ending May 15. That’s an advantage of 250 basis points over the S&P 500 Growth Index during the same period.
QBIG Could Have More Upside Ahead
The aforementioned rally has helped pare QBIG’s year-to-date loss in dramatic fashion. However, it’s still in the red since the start of the year. Just three Mag Seven names and Broadcom are in the green year-to-date as of May 15. In the case of Broadcom, that’s only narrowly so.
Said another way, it can be argued that even with the significant resurgence posted by mega-cap growth names in recent weeks, there could be more in store for the group, including QBIG holdings. That’s particularly so if more artificial intelligence (AI) advance and spending materialize.
“In recent months, Nvidia CEO Huang delivered the keynote address at CES 2025. He unveiled new AI initiatives, including Nvidia Cosmos, a computing platform for accelerating physical AI development. Cosmos offers world foundation models to help developers make next-generation autonomous vehicles and robots,” reported Scott Lehtonen for Investor’s Business Daily.
QBIG’s recent bullishness has been fueled by news that the U.S. and China paused some trade tariffs for 90 days. That’s a plus for Apple (AAPL), Amazon (AMZN) and Tesla (TSLA), among others, because those companies are highly dependent on China for components and inventory. For now, there appears to be a thaw in U.S./China trade relations. That could open the door to more progress and, potentially, more upside for QBIG.
“The upside surprise for me from this weekend was the level of Chinese engagement on the fentanyl crisis in the United States. They brought the Deputy Minister for Public Safety … and he had a very robust and highly detailed discussion,” said Treasury Secretary Scott Bessent in a statement.
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