Paul Schroeder
CMT, QQQ Equity
Product Strategist
[On-screen text] Paul Schroeder Director of Factor & QQQ Equity Product Strategy
Hi, I’m Invesco QQQ Equity Product Strategist Paul Schroeder, here to give you the quarterly highlights for Invesco QQQ ETF, also known as QQQ.
You can click through to the article to read the performance numbers yourself, but let me tell you about what else happened this quarter:
Click through to the article for more details.
Before investing, consider the Fund's investment objectives, risks, charges and expenses. Visit invesco.com for a prospectus summary prospectus with this information. Read it carefully before investing.
Not a Deposit | Not FDIC Insured | Not Guaranteed by the Bank | May Lose Value | Not Insured by any Federal Government Agency
Performance data quoted represents past performance, which is not a guarantee of future results. Investment returns and principal value will fluctuate, and shares, when redeemed, may be worth more or less than their original cost. Current performance may be higher or lower than performance quoted. Invesco QQQ’s total expense ratio is 0.18%. Please keep in mind that high, double-digit and/or triple-digit returns are highly unusual and cannot be sustained.
Performance as of 9/30/26: Invesco QQQ NAV: YTD: 20.83%; 1YR: 23.75%; 3YR: 28.01%; 5YR: 16.31%; 10YR: 20.89%; Since Inception: 10.87%. Invesco QQQ Market Price: YTD: 20.83%; 1YR: 23.79%; 3YR: 28.02%; 5YR: 16.31%; 10YR: 20.90%; Since Inception: 10.86%. NASDAQ-100 Index: YTD: 21.01%; 1YR: 24.00%; 3YR: 28.28%; 5YR: 16.55%; 10YR: 21.15%; Since Inception: 11.10%.
Invesco QQQ ETF (QQQ) increased by 0.53% for Q3 (on an NAV basis, 6/30/2026 - 9/30/2026) and underperformed the S&P 500’s Q3 total return of 2.30%.
All data is from Bloomberg, L.P. as of 9/30/2026, unless otherwise noted. An investor cannot invest directly in an index.
Returns less than one year are cumulative.
This does not constitute a recommendation of any investment strategy or product for a particular investor. Investors should consult a financial professional before making any investment decisions. The opinions expressed are those of Paul Schroeder and are based on current market conditions and are subject to change without notice. These opinions may differ from those of other Invesco investment professionals.
Shares are not individually redeemable and owners of the Shares may acquire those Shares from the Funds and tender those shares for redemption to the Funds in Creation Unit aggregations only, typically consisting of 50,000 shares.
The Index and Fund use the Industry Classification Benchmark (“ICB”) classification system which is composed of 11 economic industries: basic materials, consumer discretionary, consumer staples, energy, financials, health care, industrials, real estate, technology, telecommunications and utilities
There are risks involved with investing in ETFs, including possible loss of money. ETFs are subject to risks similar to those of stocks. Investments focused in a particular sector, such as technology, are subject to greater risk and are more greatly impacted by market volatility than more diversified investments.
The Fund is non-diversified and may experience greater volatility than a more diversified investment.
The risks of investing in securities of foreign issuers can include fluctuations in foreign currencies, political and economic instability, and foreign taxation issues.
The Nasdaq-100® Index is a stock market index made up of equity securities issued by 100 of the largest non-financial companies listed on the Nasdaq stock exchange.
An investment cannot be made into an index.
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Invesco QQQ's NAV rose during the third quarter (6/30/26 – 9/30/26), with a total return of 0.53%, underperforming the S&P 500 which returned 2.30%
QQQ’s differentiated holdings in the Technology sector and its underweight exposure and differentiated holdings to the Energy sector (per Industry Classification Benchmark- ICB) were the largest detractors to relative performance against the S&P 500 Index.
Rising energy prices related to the conflict in the Middle East contributed to higher inflation expectations, which helped drive interest rates higher. Despite higher rates and other headwinds, the S&P 500 and QQQ finished the quarter near all-time highs1.
QQQ’s Technology and Energy exposure were the two largest detractors to relative performance against the S&P 500 Index. The Technology sector performed well within the S&P 500 returning over 6.6% with an average weight of 44.26% during the quarter. However, the tech exposure in QQQ (quarterly average weight of 66.61%) included underperforming companies that the S&P 500 did not. Also, QQQ was overweight underperforming companies, contributing to the 2.38% return of QQQ’s tech exposure. Examples of these underperforming companies included Applovin’, KLA and Western Digital which returned -43.63%, -35.32% and -28.83%, respectively.
After underperforming the first half of the year, the Magnificent 7’s2 (Mag7) stock outperformed the S&P 500 in Q3 returning 11.10% collectively. Nvidia, Apple, Microsoft, Amazon.com and Meta Platforms all had positive performances for the quarter while Alphabet and Tesla had negative. As a group, the Mag7 were amongst the top contributors to QQQ’s absolute performance and relative performance vs. the S&P 500.
QQQ companies had another strong earnings season which helped combat the other headwinds faced by equities during the quarter. Microsoft’s stock had a strong day of performance, rising 15.51% on July 30th which was the day after it announced earnings. Higher than expected guidance on future revenue growth from its Azure cloud computing division was a primary contributor to the strong performance. Crowdstrike’s stock had one the most positive reactions to their quarterly results announced on August 26th, rising 20.50% the next day. The cybersecurity company beat both revenue and adjusted earnings-per-share3 expectations and stated that increased demand and revenue was driven by higher usage of agentic AI.
After having one of the largest and most publicized IPOs, SpaceX’s inclusion into QQQ had little impact on the overall performance of the ETF. The stock had an average weight of 1.23% throughout the third quarter and returned 0.93%. Much interest came from how SpaceX’s weight would change in QQQ as more shares joined the free float, the portion of a company's outstanding shares that is available for public trading in the market. Because the free float of SpaceX was below 33%, the full market capitalization was not used for its initial weight. Free float had increased to nearly 24% by the reference date of the September rebalance and dramatically increased the weight of SpaceX in QQQ at the rebalance. SpaceX ended the quarter with a weight of 2.71%, making it the eleventh largest holding.
The best performing stocks in QQQ for Q3 were Strategy Inc. (76.11%), Palantir Technologies (60.32%) and Workday (55.58%). The worst performers for the quarter were Applovin’ (-43.63%), KLA (-335.32%) and Rocket Lab (-31.45%).
Source: Bloomberg L.P., as of 9/30/2026.
Note: All periods represent calendar years. Click for standardized performance. Performance data quoted represents past performance, which is not a guarantee of future results; current performance may be higher or lower than performance quoted. Investment returns, and principal value will fluctuate, and shares, when redeemed, may be worth more or less than their original cost. See invesco.com to find the most recent month-end performance numbers. Market returns are based on the midpoint of the bid/ask spread at 4 p.m. ET and do not represent the returns an investor would receive if shares were traded at other times. An investor cannot invest directly in an index. Index returns do not represent Fund returns. Returns less than one year are cumulative. Invesco QQQ’s total expense ratio is 0.18%.
The third quarter of 2026 was shaped by four themes that contributed to investor sentiment and market movement: the continued AI investment, interest rates and Federal Reserve policy, developments in the Middle East and energy markets and a broadening of earnings growth beyond a handful of mega-cap technology companies. These factors helped equities move higher despite intermittent volatility.
One of the catalysts was the outlook for Federal Reserve policy. Equity markets spent much of the quarter reassessing the path of interest rates as inflation, labor-market data, and economic activity showed continued resilience. Interest-rate expectations appeared to have a significant impact on growth-oriented stocks. As a result, Treasury yields and Fed commentary became key drivers of day-to-day market movements. Towards the end of the quarter, Treasury yields rose sharply, with the 10-year Treasury yield reaching levels last seen in the early 2000s.
Energy prices and Middle East developments were another major catalyst because of the effect they have been having on inflation. Concerns surrounding Iran and the security of energy supplies initially contributed to higher oil prices and raised fears of renewed inflation pressures. Investors closely monitored developments affecting production and transportation routes, particularly around the Strait of Hormuz. As the quarter progressed, optimism surrounding greater stability in the region and improving energy supply conditions appeared to help ease some inflation concerns. Lower oil-price expectations provided support for consumer spending, corporate margins, and broader market sentiment. Consequently, geopolitical developments became an important macroeconomic influence on both equity and fixed-income markets.
Source: Bloomberg L.P., as of 09/30/2026.
Another important theme was the AI investment cycle. Throughout the quarter, investors focused on whether massive spending by hyperscalers and enterprises could continue translating into accelerating earnings growth. Demand for semiconductors, cloud infrastructure, networking equipment, and AI software remained robust, supporting technology-sector earnings expectations and seemed to help reinforce confidence in the long-term AI opportunity. Earnings growth forecasts for technology companies increased materially during the year, supported by continued capital expenditure tied to AI initiatives. It appeared that many investors viewed AI as potentially a significant driver of profitability and productivity growth.
Finally, one of the more constructive developments of the quarter was the broadening of earnings growth beyond the largest technology companies. While several AI-related firms continued to deliver strong results, growth also broadened to include financials, industrials, health care, and other cyclical sectors. This shift may have helped alleviate concerns that equity performance depended entirely on a small group of mega-cap technology stocks. The expansion of earnings growth across sectors may have helped increase confidence in the durability of the economic expansion and stock market performance seen in 2026.
As QQQ enters the fourth quarter of 2026, a key question is whether the massive AI spending cycle can continue translating into strong earnings growth. Spending on data centers, semiconductors, power infrastructure, and AI software has remained robust, but the many investors are increasingly distinguishing between companies demonstrating real monetization and those relying on future expectations. Earnings and guidance from Microsoft, NVIDIA, Alphabet, Amazon, and Meta may likely impact QQQ performance.
Interest rates and market breadth may be a focus. Equities remained highly sensitive to Treasury yields and Federal Reserve expectations, making inflation data and Fed communication important catalysts. At the same time, investors will be watching whether earnings growth broadens beyond semiconductors and the largest mega-cap technology companies. Broader participation from software, cybersecurity, internet and communication-services companies could reduce QQQ’s reliance on a relatively small group of AI-related market leaders.
A key period for QQQ investors will be October 29th – 30th, when five of the seven Magnificent 7 companies are currently expected to report earnings. Microsoft, Alphabet and Meta Platforms are expected to report on October 29th, followed by Apple and Amazon on October 30th. Tesla will be the first to announce on October 22nd while NVIDIA is set to announce on November 19th. Other companies that many investors will watch are Palantir announcing on November 3rd, Broadcom on December 11th and Micron Technology on December 17th. These reports may provide critical insight into AI demand, cloud growth, data-center spending, capital expenditure plans, and 2027 earnings expectations, potentially making them important catalysts for QQQ and the broader stock market during the fourth quarter.
Important Information
All data is from Bloomberg, L.P. as of 09/30/2026, unless otherwise noted.
All returns are based off NAV. Returns are cumulative unless otherwise noted.
Holdings are subject to change and are not buy/sell recommendations.
These comments should not be construed as recommendations. 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.
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.
The Index and Fund use the Industry Classification Benchmark (“ICB”) classification system which is composed of 11 economic industries: basic materials, consumer discretionary, consumer staples, energy, financials, health care, industrials, real estate, technology, telecommunications and utilities.
There are risks involved with investing in ETFs, including possible loss of money. Shares are not actively managed and are subject to risks similar to those of stocks, including those regarding short selling and margin maintenance requirements. Ordinary brokerage commissions apply. The Fund's return may not match the return of the Underlying 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.
Investments focused in a particular sector, such as technology, are subject to greater risk, and are more greatly impacted by market volatility, than more diversified investments.
The Fund is non-diversified and may experience greater volatility than a more diversified investment.
The risks of investing in securities of foreign issuers can include fluctuations in foreign currencies, political and economic instability, and foreign taxation issues.
QQQ Top 10 Holdings. Holdings are subject to change and are not buy/sell recommendations.
The Nasdaq-100® Index comprises the 100 largest non-financial companies traded on the Nasdaq. An investor cannot invest directly in an index.
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