META - QQQ: Bumpy Short-Term Ride Possible (Rating Downgrade)

2024-06-24 16:17:07 ET

Summary

• QQQ Trust ETF might have seen a nice increase so far in 2024, but the risks have risen in line with rising valuations.
• Among its top 10 constituents, only four are now trading at lower PE multiples than their five-year averages. Of these, there's only a small difference for Alphabet, and Tesla can see further downside.
• Amazon still has positive potential, and with a more prominent communications sector and less significant consumer discretionary, QQQ can still see some upside. But a pullback is increasingly likely.

When I last wrote about the Nasdaq tracker fund Invesco QQQ Trust ETF (QQQ) in March, it was losing its edge to the S&P 500 ( SP500 ) index following a significant lead in 2023. However, it’s back to growing faster (see chart below)....

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