Market participants attempting to get a handle on what’s driven mega-cap tech stocks since April’s tariff calamity don’t need to give all the credit to big-money professional investors. Some data points indicate holdings in ETFs such as the Invesco QQQ Trust (QQQ ) and the Invesco NASDAQ 100 ETF (QQQM ) are being supported by two factors beyond professional buying. Those are retail investors and share repurchase programs.
Retail investors are often viewed as skittish and lacking the firepower to earnestly affect stock prices. But recent data indicates otherwise.
“The share of retail participation in the market notched an all-time high on April 29, comprising 36% of order flow,” noted Meera Pandit, global market strategist at J.P. Morgan Asset Management. “For comparison, prior to the pandemic, the retail share of the market rarely breached 10%. Buying activity somewhat cooled in May but was still positive. Consumers have long engaged in retail therapy; retail investors appear to be buying the dip with a similar mentality.”
Buybacks Supporting QQQ Holdings, Too
The positive effects of companies buying back their own shares are pertinent in discussing catalysts for QQQ and QQQM. That’s because several of the ETFs’ top holdings are among the most cash-rich companies in Corporate America. An April report by Bloomberg noted mega-cap tech companies, including QQQ/QQQM member firms, could direct as much as $500 billion to share repurchase efforts in the months ahead.
Various earnings reports this year from QQQ/QQQM holdings have included massive buyback announcements. That cements big tech’s status as one of the premier repurchase destinations. Importantly, the tech sector, including QQQ/QQQM components, have rock-solid balance sheets and prodigious free cash flow generating capabilities. That means those companies don’t need to fund shareholder rewards with debt.
Indeed, the buyback activity has been impressive of late. Pandit points out that April was the third-highest buyback month in over a decade. Through the first four months of 2025, U.S. buyback activity is trending at its strongest pace in 12 years.
“Not only does this signal that companies are confident in their long-term prospects at these price levels, but also could reflect the confluence of strong cash balances and uncertainty,” added Pandit. “Companies may have money to spend but are wary of making capital investments given policy uncertainty, exhibited by weak but inflecting capex intentions. Similarly, M&A has thus far failed to pick up. This echoes the dynamic observed in 2018 after a massive corporate tax cut but amid the first trade war; buybacks jumped 68% y/y but capex remained subdued
For more news, information, and analysis, visit the ETF Education Channel.
