"In most years, especially in strong up years, the Nasdaq 100 has stood taller than the S&P 500, driven largely by the tech sector's outsized gains. Invesco's Q3 update shows QQQ with a NAV gain of 8.94 percent in Q3 2025, edging out the S&P 500's 8.12 percent. Still, outperformance on the way up does not guarantee the same result going forward, particularly if tech shifts from boom to sudden slowdown."
"There is no question that far more artificial intelligence hype is baked into the tech heavy QQQ compared with the S&P 500 or broader total market index funds. A higher valuation multiple can be justified if the massive AI related capex of mega cap tech leads to strong returns in the coming years. Even so, investors should remember that they can benefit from the AI wave through broader market exposure as well."
QQQ posted a NAV gain of 8.94% in Q3 2025, slightly outperforming the S&P 500's 8.12% return. QQQ carries a larger share of AI-related hype and a heavier tech concentration than broader market funds. QQQ trades near a price-to-earnings ratio of about 34.6, roughly 30% above VTI's approximate 28 P/E. Many non-tech companies are hiring technical talent and integrating AI without yet reflecting an AI premium in their stock prices. Broader funds like VTI can capture AI-driven gains if non-tech firms deliver results and experience multiple expansion. A pending fee-cut proposal exists for QQQ, and higher valuation concentration raises vulnerability if tech momentum fades.
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