There’s no denying that some big-name growth stocks, including some with clear AI ties, have recently pulled back. But that doesn’t mean the AI investment thesis is on its last legs.
Of note to investors holding ETFs like the Invesco QQQ Trust (QQQ ) and the Invesco NASDAQ 100 ETF (QQQM ) is that even amid the conjecture about AI demand, expenditures and recent equity market volatility, this disruptive technology remains a high priority for companies and professional investors. That much was on display at the recent BlackRock 2026 Outlook Forum.
“Anchoring that debate was also a focus on the physical constraints facing the buildout: compute, materials and especially energy,” noted the asset manager. “Estimates of future power demand from AI data centers and chips are [huge. And they] vary dramatically, highlighting the uncertainty.”
The bullish commentary on semiconductor demand is relevant to QQQ and QQQM investors. That’s because those ETFs, which have the same lineups, are homes to scores of chip stocks. Those include AI titans Nvidia (NVDA) and Broadcom (AVGO).
QQQ Still in Sound Position
In addition to concerns about the viability of AI spending and whether those expenditures are bearing fruit, a common critique of AI-linked stocks, including those residing in QQQ and QQQM, is that valuations are too frothy. That implies they might be in bubble territory.
“And elevated equity valuations were a particular focus in assessing how to think about what those valuations mean in this unique environment where mega cap tech companies are expanding the financing of the AI buildout, as seen with recent bond sales,” added BlackRock.
For investors considering QQQ and QQQM, it should be noted that the S&P 500 Technology Index currently trades at 42x earnings. By no means is that cheap. But it’s well below the 67x seen at the height of the internet bubble 25 years. That’s a scenario in which the current state of AI investing is frequently compared.
Also boding well for ETFs such as QQQ and QQQM and arguably overlooked is that technology companies are sporting noticeably better quality traits today than they were 25 years ago. As BlackRock noted in a previous report, the S&P 500 Technology Index, which is home to many of the tech stocks residing in QQQ and QQQM, has average return on equity of 30% compared to the long-term average of 20%.
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