Over the past year, the Invesco QQQ Trust ETF (QQQ) received a major boost, primarily due to its exposure to prominent technology companies such as Apple (NASDAQ: AAPL), Alphabet (NASDAQ: GOOGL) Meta (NASDAQ: META), Amazon (NASDAQ: AMZN), Nvidia (NASDAQ: NVDA), Microsoft (NASDAQ: MSFT), and Tesla (NASDAQ: TSLA).
Most of these firms recorded an end rally inspired by the possibility of slowed interest rates in 2024.
Overall, the exchange-traded fund (ETF) tracking the Nasdaq 100 Index had a dazzling 2023, gaining over 50%. As we progress into 2024, investors will be keen to monitor how the ETF performs amid key fundamentals as it seeks to maintain its position among the leading growth funds. Here is the ETF’s forecast for 2024.
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QQQ 2024 forecast
The outlook for the Invesco QQQ Trust ETF in 2024 remains positive, primarily due to the profile of companies it tracks. For instance, with the current portfolio, QQQ investors have access to a growing segment of the technology world, including artificial intelligence (AI), semiconductors, cybersecurity, cloud computing, and e-commerce. Notably, these themes recorded significant growth in the past year and are poised for long-term growth beyond 2024.
Additionally, the fund provides substantial exposure to international growth, featuring prominent entities such as MercadoLibre (NASDAQ: MELI) and China’s PDD Holdings (NASDAQ: PDD).
At the same time, the growing optimism that the Federal Reserve may halt rate hikes and avert a recession continues to be a source of optimism regarding the possibility of tech stocks rallying.
In this line, the Global Fund Managers’ survey by Bank of America revealed that almost 70% of participants envision a “soft landing” scenario for the global economy in 2024. In this scenario, the economy avoids a recession while experiencing a deceleration in inflation.
Consequently, investors might adjust their portfolios by moving away from cash positions.
On the other hand, 102 Wall Street analysts at TipRanks forecast a positive outlook for the QQQ ETF. The analysts, basing their 12-month prediction on the ETF’s past three months’ performance, project that QQQ will likely trade at an average price of $447.99. They provide a high forecast of $553.18 and a low forecast of $356.73. The average price target represents a 6.37% change from the last price of $421.18.
Notably, 85 analysts recommend buying the ETF, while 17 suggest holding, with none recommending selling.
QQQ bearish forecast
While the overall sentiment is optimistic, investors should look for possible challenges likely to impact market volatility. Factors such as inflation rates and key economic indicators, including the Consumer Price Index (CPI), will significantly influence the Fed’s next policy decisions.
Additionally, specific companies under the fund may face challenges related to particular themes. For instance, concerns about the slowing growth of Alphabet’s cloud computing division and competition for its Search business pose potential risks.
However, these issues appear manageable, considering that the company is putting in place measures to curb competition such as the one posed by OpenAI’s ChatGPT.
Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.
