Invesco QQQ monthly review

Overview

• For the month of August, QQQ saw an NAV total return of 0.91% and underperformed the S&P 500 Index which returned 2.03%. The Russell 1000 Growth Index returned 1.12% outperforming QQQ, while the Russell 1000 Value Index returned 3.19%, also outperforming QQQ.¹
• QQQ’s relative underperformance vs. the S&P 500 Index was driven by its underweight exposure within the Health Care sector and its overweight exposure in the Consumer Discretionary sector.
• QQQ saw an outflow of approximately $1.15 billion.
• QQQ ended the month with $363 billion in AUM and remained the 5th largest ETF in the US (based on AUM).
• For the month of August, shares traded of QQQ increased by 9.91% month-over-month and notional value traded increased by 11.76% month-over-month.²

Market Recap

QQQ extended its monthly positive performance streak to five months after it advanced by 0.91% on an NAV total return basis for August. Markets closed higher in August, as corporate earnings remained resilient despite added tariff costs and lingering growth concerns. Equity markets received an added boost following Federal Reserve Chairman Jerome Powell’s speech at the annual Jackson Hole Summit.³ Chairman Powell struck a notably more dovish tone than anticipated by markets leading equity markets to rally on increased optimism over potential interest rate cuts in September. Both the Nasdaq 100 Index and S&P 500 Index hit new all-time highs in August. The Nasdaq 100 Index set a new all-time on August 12^th before retreating in the end of the month, while the S&P 500 set its new all-time high on August 28^th. The S&P 500 ended August higher by 2.03% on a total return basis. Large cap growth and value also finished in positive territory after the Russell 1000 Growth advanced by 1.12% and underperformed the Russell 1000 Value which increased by 3.19% for August. For the year, QQQ is higher by 11.83%, and from its yearly low on April 8^th, is higher by 37.26%.

Attention at the beginning of the month was focused on softening economic data as both the Institute for Supply Management (ISM) Manufacturing and Services Indexes, two closely watched indicators of economic health and activity, came in below consensus estimates.⁴ July ISM Manufacturing, announced August 1^st, was reported at 48, under consensus estimate of 49.5, implying a weaker manufacturing backdrop than anticipated. New orders and employment expectations also came in weaker than anticipated, however manufacturing prices paid were also notably weaker than estimates. On August 5^th, the ISM Services Index July report was announced at 50.1, below the consensus estimate of 51.5, while prices paid in services were announced higher than anticipated. Higher services prices coupled with weakening economic and employment indicators underscore a challenging environment for the Federal Reserve’s dual mandate of maximum employment and stable prices.

Trump Administration’s tariff policy continued to evolve throughout the month with notable developments regarding U.S. and China relations. On August 12^th, President Trump extended the pause of higher tariffs on Chinese goods for an additional 90 days, providing at least another three months of relative trade stability between the U.S. and China. President Trump’s executive order extended the truce through November 10^th, easing worries of reescalation of the tariff war between the world’s two largest economies and providing a longer runway for conversations to continue surrounding current unresolved issues between the two countries.

In the middle of the month, the July Consumer Price Index (CPI) was released and was viewed as fairly benign, with readings coming in slightly below expectations.⁵ There were some concerns among investors that the data would start showing the adverse effects of tariffs, with spikes in the reading. However, year-over-year CPI was reported at 2.7%, only slightly below the 2.8% forecast, while the core CPI reading (which strips out the volatile food and energy components) was reported at 3.1%, slightly above economists’ estimates. On a month-over-month basis headline CPI was reported at 0.2%, while the core CPI came in at 0.2%, both in line with expectations. Concerns over the adverse effects of tariffs continued following the release of the July US Producer Price Index (PPI), with a year-over-year print of 3.3%, higher than economist estimates of 2.5%.⁶ On a month-over-month basis headline PPI was reported at 0.9%, higher than economist estimates of 0.2%, reigniting worries surrounding the impacts of tariffs on prices.

The Federal Reserve held its annual Jackson Hole Summit in September, which featured Fed Chairman Jerome Powell’s hotly anticipated press conference. Powell’s struck a more dovish tone than anticipated, leaving the door open for the potential of rate cuts following at their next meeting scheduled from September 16-17th.⁷ Powell remarked, “The stability of the unemployment rate and other labor market measures allows us to proceed carefully as we consider changes to our policy stance”, adding, “ with policy in restrictive territory, the baseline outlook and the shifting balance of risks may warrant adjusting our policy stance”. Powell cited employment data from July and recent downward revisions on the labor front to highlight rising downside risks to employment. Powell also mentioned, “It is also possible, however, the risks of upward pressure on prices from tariffs could spur a more lasting inflation dynamic, and that is a risk to be assessed and managed.” Equity markets rallied as Powell’s more dovish rhetoric raised optimism surrounding potential rate cuts in September. Powell’s comments appear to have provided an additional tailwind towards more value-oriented stocks as well as smaller size stocks as many investors began to rotate from large growth towards value.

QQQ Performance

From a sector perspective, six of the ten sectors represented in QQQ finished in positive territory for August. Basic Materials was the best performing sector, which advanced by 4.65%. QQQ’s relative underperformance versus the S&P 500 was driven by its underweight exposures to the Health Care sector and overweight exposure to the Consumer Discretionary sector. The Health Care sector averaged a 4.59% weighting within QQQ and declined -0.58% compared to an 8.48% average weighting in the S&P 500 and total return of 5.32%. The Consumer Discretionary sector averaged an 18.44% weighting for the month within QQQ and saw a total return of 1.45%. This compares to the sector’s average weight in the S&P 500 of 14.44% for July with a total return of 2.99%.

Standardized performance - Performance quoted is past performance and cannot guarantee comparable future results; current performance may be higher or lower. Visit invesco.com/performance for the most recent month-end performance. Investment returns and principal value will vary; you may have a gain or loss when you sell shares. Fund performance reflects fee waivers, absent which, performance data quoted would have been lower. Invesco QQQ’s total expense ratio is 0.20%. Index performance does not represent fund performance.

Technology and Energy also detracted from QQQ relative performance vs. the S&P 500. The Technology sector averaged a 62.57% weighting (vs. 39.74% in the S&P 500) and increased by 0.99% (compared to a 0.88% increase in the S&P 500 Index). The Energy sector averaged a 0.48% weighting in QQQ (vs. 2.97% in the S&P 500) and increased by 1.04% in QQQ (vs. a 3.77% increase in the S&P 500 Index) for August.

As of August 31^st, 94 of the 100 QQQ companies had reported quarterly earnings. 83 of the 94 companies accounting for 82% of QQQ’s weight had reported beating consensus earnings per share (EPS) estimates.⁸ Further, 85 of the 94 companies accounting for 83% of QQQ’s weight had reported beating consensus revenue expectations. For 2Q 2025, the average EPS beat was 10.3% and the average EPS miss was -5.1%. Nasdaq 100 weighted year-over-year earnings growth for through the current reporting period is 35.4%, well above the expected growth of 22.3%. From a revenue perspective, Nasdaq 100 weighted year-over-year growth for the current reporting period is 12.1%, above the predicted 9.7% growth rate.

Intel was the best performing company in QQQ for the month of August. Intel became the subject of headlines in early August following President Trump urging Intel’s CEO Lip-Bu Tan to resign citing conflicts of interest with reference to the CEO’s ties to China. Information resurfaced regarding Tan’s past investments in China when leading Cadence Design Systems and Cadence’s sale of products to a Chinese military university. Shares fell 3.16% on August 7^th following the breaking headlines. Intel CEO Tan met with the President Trump at the White House on August 11^th where Intel said Tan and Trump discussed the company’s “commitment to strengthening U.S. technology and manufacturing leadership”. However, only days after the meeting it was reported that the White House was in talks with Intel to acquire a 10% stake in the company. Shares climbed ~7.4% on August 14^th following the development. On August 22^nd it was announced that the U.S. government will receive 433.3 million shares of common stock, representing 9.9% of the outstanding shares, totaling a $8.9 billion investment. The deal is thought to be helpful in shoring up Intel’s planned factory hub in Ohio.

On August 27^th, Nvidia announced its quarterly earnings results. Nvidia’s earnings release was hotly anticipated as Nvidia is widely viewed by market participants as a bellwether of the broader artificial intelligence trend. Nvidia fiscal Q2 2026 reported revenue came in $716 million—or 1.6%—above consensus analyst estimate.⁹ Additionally, quarterly earnings per share beat the consensus estimate by 4.1%. Nvidia’s quarterly revenue was reported as $46.7 billion, marking growth of 55.6% year-over-year. Earnings before interest and tax expenses increased by 52.6% year-over-year to $28.4 billion, while operating margins decreased to 60.8% compared to 62.1% a year earlier. Despite solid headline results beating consensus estimate from a top line and bottom line perspective, data center revenue came in lower than anticipated.¹⁰ Data center revenue for the quarter totaled $41.1 billion missing consensus estimate of $41.29 billion. Data center revenue results grew 56% year-over-year, however, revenue for the segment has now missed the market’s lofty expectations in consecutive quarters. Geopolitical tensions between the U.S. and China have proved to be limiting as Nvidia said there were no H20 sales to China-based customers in the second quarter. Nvidia have been impacted by US export restrictions and opposing pressure from China. Despite positive developments regarding easing export controls to China, this has yet to translate into a rebound in data center revenue. In all the Nvidia’s quarterly results demonstrated resilience amidst a challenging geopolitical backdrop.

Company guidance from Nvidia also came in on the lower end of analyst expectations, however this forecast excluded data center revenue from China. However, company CEO Jensen Huang said that “Global demand for Nvidia’s AI infrastructure is incredibly strong. AI inference token generation has surged tenfold in just one year, and as AI agents become mainstreams, the demand for AI computing will accelerate.”.¹¹

Trading Stats

For the month of August, shares traded of QQQ increased by 9.64% month-over-month along with notional value traded increased by 11.76% month-over-month. The month saw an average of 45.95 million shares trade each day (vs. 41.91 million last month) for a value of $26.20 billion (vs. $23.44 billion last month). That compares to averages of 65.27 million shares and $6.82 billion over the life of the fund, and 40.03 million shares and $20.37 billion for the past 12 months.