Wall Street logged strong gains last week, with the Nasdaq Composite Index outperforming. The tech-heavy index climbed 5.9%, marking the best week of this year. Invesco QQQ QQQ, which serves as a proxy to the Nasdaq Index, gained 5.9% last week.

We have highlighted the five stocks of QQQ that led the way higher in the portfolio last week. These are Warner Bros. Discovery WBD, ARM Holdings PLC Sponsored ADR ARM, Micron Technology MU, On Semiconductor ON and Constellation Energy Corporation CEG.

The gains were driven by the tech stocks that resumed their momentum on looming rate cuts this week. The Fed is expected to deliver its first interest rate cut since 2020 in its meeting, scheduled to start tomorrow. Markets are pricing in 50% chances of a 50-bps rate cut and 50% odds of a 25-bps rate cut, according to CME Group's FedWatch tool.

When the Fed starts cutting rates, technology stocks will receive a boost. As the tech sector relies on borrowing for superior growth, borrowing more money for further initiatives is cheaper when interest rates are low (read: Sector ETFs Set to Explode as Fed Rate Cut Bets Gain Steam). 

The AI boom will continue to fuel the rally in the sector, with companies investing considerable sums in this technology. The expansion of AI applications holds the promise of ushering in fresh growth opportunities in the tech sector and beyond. Per a new report by Grand View Research, the global artificial intelligence market is expected to witness a CAGR (2024-2030) of 36.6% to reach $811.75 billion by 2030.

The three stocks — NVIDIA, Apple (AAPL) and Microsoft (MSFT) — are in a race to become the world’s most valuable company and hit a market capitalization of $4 trillion on surging enthusiasm over AI capabilities.

Let us take a closer look at the fundamentals of QQQ.

QQQ in Focus

Invesco QQQ offers exposure to the 101 largest domestic and international non-financial companies listed on the Nasdaq. Information technology accounts for 61.5% of the assets, while consumer discretionary makes up 17.5% share. 

Invesco QQQ is one of the largest and most popular ETFs in the large-cap space, with an AUM of $278.1 billion and an average daily volume of around 36 million shares. Invesco QQQ charges investors 20 bps in annual fees and has a Zacks ETF Rank #2 (Buy) with a Medium risk outlook (read: 5 Technology ETFs at the Forefront of the August Rebound). 

Below, we have highlighted the abovementioned five stocks in the ETF with their respective positions in the fund’s basket.

Top-Performing Stocks in QQQ

Warner Bros. Discovery is a premier global media and entertainment company that combines WarnerMedia Business’s premium entertainment, sports and news assets with Discovery’s leading non-fiction and international entertainment and sports businesses. The stock rose 10.8% last week. WBD makes up for 0.14% of the assets in QQQ and currently carries a Zacks Rank #3 (Hold). It has a Growth Score of B.

ARM Holdings provides processor designs and software platforms. The stock makes up for 0.11% of the assets in the QQQ portfolio. Arm Holdings gained 5.9% last week and currently has a Zacks Rank #3. 

Micron Technology has established itself as one of the leading worldwide providers of semiconductor memory solutions. The stock makes up for 0.68% of the assets in the QQQ portfolio. Micron Technology has gained 4.6% and carries a Zacks Rank #3 at present. It has a Growth Score of B.

On Semiconductor is an original equipment manufacturer of a broad range of discrete and embedded semiconductor components. The stock rose 3.4% last week and makes up for 0.2% of QQQ. On Semiconductor currently has a Zacks Rank #3. 

Constellation Energy generates and markets electricity. It sells natural gas, renewable energy and other energy-related products and services. The stock grew 3.2% last week and makes up 0.41% of the assets in the QQQ portfolio. Constellation Energy presently has a Zacks Rank #3 and a Value Score of B.

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Constellation Energy Corporation (CEG) : Free Stock Analysis Report

Micron Technology, Inc. (MU) : Free Stock Analysis Report

ARM Holdings PLC Sponsored ADR (ARM) : Free Stock Analysis Report

Warner Bros. Discovery, Inc. (WBD) : Free Stock Analysis Report

Invesco QQQ (QQQ): ETF Research Reports

ON Semiconductor Corporation (ON) : Free Stock Analysis Report

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