QQQ and QQQM both track the Nasdaq-100 Index (NDX) and have identical rosters – DNA that’s always pertinent, but especially so when discussing the potential for lifts that could accrue to these ETFs in the days and weeks ahead.
There are positive expectations in place. FactSet notes the current earnings growth rate for the S&P 500, which is home to dozens of stocks residing in QQQ and QQQM, for the fourth quarter is 8.2%. That would mark the 10 straight quarter of year-over-year growth, according to the research firm. The news could be even better for QQQ/QQQM investors.
“Based on the average improvement in the earnings growth rate during the earnings season, the index will likely report earnings growth of at least 14% for the fourth quarter, which would mark the 5th straight quarter of double-digit growth,” noted FactSet’s John Butters.
Earnings Growth in QQQ
As advisors and investors know, QQQ and QQQM are growth ETFs. Well-known companies in the communication services and technologies sectors have set high bars in recent years.
Broadly speaking, QQQ/QQQM holdings have cleared those increasingly high hurdles. That’s important because those sectors are epicenters of growth and they combine for nearly two-thirds of the Invesco ETFs’ rosters. Those sectors could be primed to again lead S&P 500 growth.
“Over the past five years, actual earnings reported by S&P 500 companies have exceeded estimated earnings by 7.7% on average,” observed Butters. “During this same period, 78% of companies in the S&P 500 have reported actual EPS above the mean EPS estimate on average. As a result, from the end of the quarter through the end of the earnings season, the earnings growth rate has increased by 7.4 percentage points on average (over the past five years) due to the number and magnitude of positive earnings surprises.”
QQQ and QQQM investors should note that the S&P 500 member firms that have delivered earnings thus far are holding up their ends of the bargain, potentially paving the way for more excellence from these ETFs.
“Of the 33 S&P 500 companies that have reported actual earnings for Q4 2025 through January 16, 79% have reported actual EPS above the mean EPS estimate. In aggregate, actual earnings reported by these 33 companies have exceeded estimated earnings by 5.8%,” concluded Butters.
For more news, information, and analysis, visit the ETF Education Content Hub.
