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Nasdaq Hits New Highs: 5 Hot Stocks in the ETF

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Sweta Killa
·5 min read
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The tech-heavy Nasdaq Composite Index hit an all-time high on Dec 7, with a new round of COVID-19 restrictions amid surging infections.

According to a CNBC analysis of Johns Hopkins data, the United States has reported a record-high average of more than 196,200 cases of the virus over the past seven days, up more than 20% compared with a week ago. If the current trends hold, the figure will likely top 200,000 this week. Additionally, hospitals across the country have a higher load of COVID-19 patients than ever before and the country’s outbreak is primed to set even more grim records this week (read: COVID-19 Cases on the Rise: ETFs to Bet On).

The increasing number of coronavirus cases has led some states and cities to re-impose stricter social distancing measures to curb the outbreak. This has once again compelled investors to take flight to e-commerce technology stocks, which are the largest beneficiaries of this trend. “Although vaccine approval in the U.S. appears imminent, increased restrictions or shutdowns in the country could slow the near-term recovery in economic growth,” as quoted on CNBC by Goldman Sachs equity strategists.

As a result, Invesco QQQ QQQ, which serves as a proxy to the index, has also hit new highs, gaining 0.6% in the last trading session. Let’s take a closer look at the fundamentals of QQQ.

QQQ in Focus

This ETF provides exposure to the 103 largest domestic and international non-financial companies listed on the Nasdaq by tracking the Nasdaq 100 Index. Information technology accounts for 47.4% of the assets, while communication services and consumer discretionary make up more than 19% share each.

QQQ is one of the largest and most-popular ETFs in the large-cap space with AUM of $146.9 billion and average daily volume of around 34.6 million shares. It charges investors 20 bps in annual fees. The fund has a Zacks ETF Rank #1 (Strong Buy) with a Medium risk outlook. Though most of the stocks in the fund’s portfolio have delivered strong returns, a few have outperformed in the last trading session (read: 5 ETFs at the Forefront of the Latest Market Rally).

Below we have highlighted those five best-performing stocks in the ETF with their respective positions in the fund’s basket:

Top-Performing Stocks in QQQ

Copart Inc. CPRT: It provides online auction and a wide range of remarketing services to process and sell salvage and clean title vehicles. The stock rose 2.2% on Dec 7 and accounts for 0.2% in the fund’s basket. It saw positive earnings estimate revision of a penny over the past seven days for fiscal year (ending July 2021) and has an expected earnings growth rate of 20.6%. The stock has a Zacks Rank #2 (Buy) and a Growth Score of B. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Workday Inc. WDAY: It is a provider of enterprise-level software solutions for financial management and human resource domains. The stock has risen 2.3% in the same timeframe and has 0.3% exposure in the fund’s basket. Workday saw positive earnings estimate revision of 12 cents over the past 30 days for the fiscal year (ending Jan 2021) and has an expected earnings growth rate of 41%. It has a Zacks Rank #3 (Hold) and a Growth Score of A.

Broadcom Inc. AVGO: This company is a premier designer, developer and global supplier of a broad range of semiconductor devices with a focus on complex digital and mixed signal complementary metal oxide semiconductor (CMOS) based devices and analog III-V based products. This stock makes up for 1.3% share in the fund’s basket and delivered robust return of 2.2% on the day. Though the company witnessed no earnings estimate revision for fiscal year (ending Oct 2021) over the past month, its earnings are estimated to grow 14.7%. The stock has a Zacks Rank #3 and a Growth Score of B.

Lam Research Corporation LRCX: This company supplies wafer fabrication equipment and services to the semiconductor industry. Though it saw no earnings estimate revision for fiscal year (ending Jun 2021) over the past month, its earnings are estimated to grow 39.9%. The stock has a Zacks Rank #2 and a Growth Score of C. Lam Research was up 1.7% on Dec 7 (read: Semiconductor ETFs Up At Least 40% in 2020: More Gains Ahead).

Charter Communications Inc. CHTR: It is the second largest cable operator in the United States and a leading broadband communications company, providing video, Internet and voice services. The stock saw positive earnings estimate revision of 13 cents over the past 30 days for this year and has an expected earnings growth rate of 86.7%. Charter Communications makes up for 1.1% allocation and rose 1.5% on Dec 7. The stock has a Zacks Rank #3 and a Growth Score of B.

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Lam Research Corporation (LRCX) : Free Stock Analysis Report
 
Charter Communications, Inc. (CHTR) : Free Stock Analysis Report
 
Workday, Inc. (WDAY) : Free Stock Analysis Report
 
Copart, Inc. (CPRT) : Free Stock Analysis Report
 
Broadcom Inc. (AVGO) : Free Stock Analysis Report
 
Invesco QQQ (QQQ): ETF Research Reports
 
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