Market outlook QQQ quarterly outlook report
Read about the latest Invesco QQQ ETF fund performance and what our strategist expects next quarter.
Investing Basics Making the short list: How Nasdaq-100 giants got their start
Key takeaways:
- The Nasdaq-100® Index is home to some of the most innovative companies on the planet.
- The journey from making it to the Nasdaq-100 to some of the world’s best-known brands often involves investing heavily in R&D and taking bold risks.
- These companies’ stories can offer lessons in how strategic investments and groundbreaking ideas can reshape industries and help deliver exceptional growth.
The Nasdaq-100 Index is home to some of the most groundbreaking companies in history, from Apple and Microsoft to Amazon and Meta Platforms. These global leaders didn’t reach their heights by chance—they got there by prioritizing innovation, investing heavily in research and development (R&D), and making bold decisions that reshaped industries.1 Their journey to becoming some of the biggest names in the Nasdaq-100, and eventually the world, offers valuable insights into how relentless innovation can fuel success.
R&D: The launchpad for innovation
A common thread among many Nasdaq-100 giants is their commitment to R&D.2 These companies consistently dedicate significant resources to creating new products, services, and technologies, often disrupting existing markets in the process.
Here are some examples from some of the world’s best-known brands:
- Apple: Apple’s groundbreaking innovation came with the launch of the iPhone in 2007. This product didn’t just revolutionize the smartphone industry; it created a blueprint for mobile computing. Apple’s R&D focus, spending $29.915 Billion in 2023, propelled the company from a niche computer maker to one of the largest companies in the world.
- Microsoft: While known initially for its Windows operating system, Microsoft’s journey into cloud computing marked a significant turning point. Its Azure platform, a result of years of R&D investment ($27.195 Billion in 2023), positioned the company as a leader in enterprise technology, helping it diversify and thrive in the digital era.
- Amazon: Amazon’s leap from an online bookseller to a tech-fueled retail powerhouse can be credited to its innovative ventures like Amazon Web Services (AWS). This cloud computing platform transformed the company’s business model, making it indispensable for businesses worldwide and cementing Amazon’s place in the Nasdaq-100. In 2023, Amazon spent an astounding $85.622 Billion on R&D.
Source: Bloomberg L.P. as of 12/31/2024.
The big bets that paid off
Beyond just R&D spending, some Nasdaq-100 leaders made pivotal bets that set them apart from the competition.
- Meta (formerly Facebook): The parent company of Facebook has made strategic investment in social platforms, such as Instagram and WhatsApp, helping ensure its position in the digital advertising space. More recently, its push into virtual and augmented reality, though ambitious, reflects its long-term vision for reshaping how people interact online.
- Netflix: Initially a DVD rental service, Netflix’s journey into streaming was a bold move that transformed the way we consume entertainment. Its investments in content algorithms and original programming not only grew its subscriber base but also set a new industry standard.
- Nvidia: Nvidia’s shift from producing graphics processing units (GPUs) for gaming to becoming a cornerstone of artificial intelligence (AI) and machine learning highlights another big bet that paid off. Its GPUs now power cutting-edge AI research, autonomous vehicles, and high-performance computing. This pivot has solidified its position as a Nasdaq-100 leader.
These companies’ willingness to experiment and pursue forward-looking projects have played a significant role in their growth—and may continue to do so in the future.
Innovation: A Nasdaq-100 hallmark
Getting into the Nasdaq-100, which contains the 100 largest non-financial companies listed on the Nasdaq Exchange, isn’t easy. But these heavyweights have demonstrated how prioritizing R&D and embracing disruption can lead to incredible growth. In the past three calendar years, companies in the Invesco QQQ ETF invested more of their revenue into R&D than those in the S&P 500 and Russell 1000 Growth indexes.3
This level of investment helps these companies to stay at the forefront of their industries. Whether it’s Apple reimagining consumer tech, Tesla pushing the boundaries of sustainable energy, or Nvidia leading the AI revolution, innovation remains a defining characteristic of the Nasdaq-100.
Access innovation with QQQ
The success of companies like Apple, Amazon, Microsoft, Meta, Tesla, Netflix, and Nvidia is a testament to the power of R&D and bold innovation. Their stories offer lessons in how strategic investments and groundbreaking ideas can reshape industries and deliver exceptional growth.
Investors looking to align their portfolios with companies prioritizing innovation have the opportunity to tap into the Nasdaq-100 through Invesco QQQ, gaining exposure to the next generation of leaders already making their mark.
How to invest in QQQ
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Past performance is not a guarantee of future results. An investor cannot invest directly in an index.
Diversification does not guarantee a profit or eliminate the risk of loss.
This does not constitute a recommendation of any investment strategy or product for a particular investor. Investors should consult a financial professional/financial consultant before making any investment decisions.
The opinions expressed are those of the author, are based on current market conditions and are subject to change without notice. These opinions may differ from those of other Invesco investment professionals.
Forward-looking statements are not guarantees of future results. They involve risks, uncertainties and assumptions; there can be no assurance that actual results will not differ materially from expectations.
There are risks involved with investing in ETFs, including possible loss of money. Index-based ETFs are not actively managed. Actively managed ETFs do not necessarily seek to replicate the performance of a specified index. Both index-based and actively managed ETFs are subject to risks similar to stocks, including those related to short selling and margin maintenance. Ordinary brokerage commissions apply. The Fund's return may not match the return of the Index. The Fund is subject to certain other risks. Please see the current prospectus for more information regarding the risk associated with an investment in the Fund.
The Nasdaq-100® Index comprises the 100 largest non-financial companies traded on the Nasdaq. An investor cannot invest directly in an index.
This content should not be construed as an endorsement for or recommendation to invest in Apple, Microsoft, Amazon, Meta Platforms, Tesla, Netflix, or NVIDIA. Neither Apple, Microsoft, Amazon, Meta Platforms, Tesla, Netflix, nor NVIDIA are affiliated with Invesco. Only 7 of 101 underlying Invesco QQQ ETF fund holdings are featured. The companies referenced are meant to help illustrate representative innovative themes, not serve as a recommendation of individual securities. Holdings are subject to change and are not buy/sell recommendations. See invesco.com/qqq for current holdings. As of 12/2/2024, Apple, Microsoft, Amazon, Meta Platforms, Tesla, Netflix, and NVIDIA made up 8.75%, 7.69%, 5.31%, 4.95%, 4.15%, 2.39%, and 8.16%, respectively, of Invesco QQQ ETF.