Tech Trying Investors’ Patience, But The Sector’s Still a Must-Own

Why It Matters

Tech continues to be the primary growth engine, and ETFs like QQQ/QQQM provide indispensable, diversified access to its secular opportunities.

Key Takeaways

• Nasdaq-100 down 1.8% YTD, still up 82% 5‑yr.
• QQQ/QQQM deliver 23.33% tech return last year.
• 2026 earnings growth forecast highest among sectors.
• Semiconductor exposure fuels AI-driven compute demand.
• BofA recommends AI, robotics, chip themes despite valuation stretch.

Pulse Analysis

The Nasdaq‑100’s modest 1.8 % slide this year has sparked talk of a tech slowdown, yet the index still carries an 82 % gain over the past five years. Such breadth‑driven pullbacks are typical when investors rotate into value‑oriented names, but they rarely erase the sector’s growth momentum. Analysts at Bank of America note that while valuations appear stretched, the underlying earnings trajectory remains robust. For portfolio managers, the key question is whether short‑term price pressure outweighs the long‑term upside that tech continues to deliver.

Bank of America’s research highlights a 23.33 % return for the tech component of QQQ over the last twelve months and a 14 % compound annual growth rate across the past five years. More compelling is the projected 2026 earnings growth rate, the highest of any sector, which underpins the premium multiples seen in leading AI and robotics firms. The report argues that exposure to disruptive themes—artificial intelligence, autonomous systems, and advanced automation—remains essential for investors seeking secular growth, even if short‑term sentiment wavers.

Semiconductor exposure is a hidden strength of both QQQ and its lower‑cost sibling QQQM. While not pure chip funds, they hold a broad basket of silicon leaders that stand to benefit from the AI‑driven surge in compute intensity, especially as the industry shifts from model training to inference workloads. Supply constraints in memory, optics and advanced equipment keep inventories tight, supporting price resilience. By bundling these chip stocks with broader tech holdings, the ETFs give investors a balanced play on the AI boom without the concentration risk of a dedicated semiconductor vehicle.