5 Stocks Driving Nasdaq 100 ETF Higher in 2025

The Nasdaq 100 surged to a record high close, the first since February, buoyed by a combination of easing trade and geopolitical tensions, AI enthusiasm, dovish Fed bets, and standout tech earnings. The index is up 5.6% so far this year, while Invesco QQQ QQQ, which serves as a proxy to the index, gained about 4%.

While most of the stocks in the QQQ ETF portfolio have provided handsome returns, we have highlighted five that led the portfolio higher. These are Palantir Technologies Inc. PLTR, Zscaler ZS, Micron Technology MU, MercadoLibre, Inc. MELI and Netflix NFLX.

Trade Tensions & Geopolitics Ease

Trump has softened his stance on tariffs and taken a measured approach to trade negotiations. “Markets have moved higher on tariff postponement and the perception that they will be more moderate than initially announced,” noted Richard Saperstein, CIO at Treasury Partners. Still, he cautioned that “headline sensitivity” remains high, with volatility likely to persist as trade talks evolve.

Hopes of de-escalation in the Israel-Iran conflict boosted market sentiment this week, easing risk-off pressures (read: Ceasefire Between Israel and Iran? ETFs Likely to Gain).

AI Momentum

Renewed AI enthusiasm among investors after a slowdown early in the year is driving tech stocks higher, especially NVIDIA NVDA and Microsoft MSFT (read: ETFs Poised to Win in the MSFT vs. NVDA Market Cap Battle). 

With rates still high and volatility lingering, the mega-cap tech names are proving to be the market’s new safe haven.

Fed Rate Cut Bets

The Federal Reserve kept its interest rate steady at 4.25-4.5%, signaling a continued "wait-and-see" stance as it monitors the effects of the Trump administration's economic policies. The central bank reaffirmed its outlook for two interest rate cuts before the end of the year.

Resilient Economic Growth

The economic indicators paint a stable picture for economic growth. Americans have started to feel optimistic about the economy, as the initial shock from steep tariffs begins to wear off and inflation pressure eases. U.S. consumer sentiment climbed in June for the first time in six months, offering a glimmer of optimism amid lingering policy uncertainty. 

The U.S. jobs market also remained resilient with the economy adding more-than-expected 139,000 jobs in May, and the unemployment rate remaining unchanged at 4.2%. Inflation has been cooling. The Consumer Price Index rose just 0.1% year over year in May, putting the annual inflation rate at 2.4%. Inflation declined from April’s 0.2% increase. Core inflation, which strips out volatile food and energy prices, was 2.8%, flat year over year, well below its levels in 2022 and 2023. Monthly core prices increased just 0.1%, against expectations of a 0.3% gain. 

Let’s take a closer look at the fundamentals of QQQ.

QQQ in Focus

This ETF provides exposure to the 101 largest domestic and international non-financial companies listed on the Nasdaq by tracking the Nasdaq 100 Index. Information technology accounts for 57.2% of the assets, while consumer discretionary makes up for a 19.7% share. 

QQQ is one of the largest and most popular ETFs in the large-cap space with an AUM of $335.4 billion and an average daily volume of more than 48 million shares. It charges investors 20 bps in annual fees. The fund has a Zacks ETF Rank #3 (Hold) with a Medium risk outlook.

Best Stocks of QQQ

Palantir Technologies builds and deploys software platforms for the intelligence community, principally in the United States. The stock has jumped more than 89% so far this year and has an estimated earnings growth rate of 41.46% for 2025. Palantir Technologies has a Zacks Rank #3 (Hold) and a Growth Score of A. 

Zscaler is one of the world’s leading providers of cloud-based security solutions. The company offers a full range of enterprise network security services, including web security, Internet security, antivirus, vulnerability management, firewalls, and control over user activity in mobile, cloud computing, and Internet of Things environments. Zscaler saw a solid earnings estimate revision of 12 cents over the past 30 days for the fiscal year (ending July 2025) and has soared about 71% so far this year. The stock has a Zacks Rank #3 and a Growth Score of A.

Micron Technology has established itself as one of the leading worldwide providers of semiconductor memory solutions. The stock has climbed 52% so far this year and has an estimated earnings growth rate of 433.1% for the fiscal year (ending August 2025). It has a Zacks Rank #3 and a Growth Score of A (read: Why Big Tech Stocks Are Powering Market Gains Again).

MercadoLibre is one of the largest e-commerce platforms in Latin America. The company is a market leader in e-commerce in Brazil, Argentina, Colombia, Chile, Ecuador, Costa Rica, Peru, Mexico and Uruguay based on unique visitors and page views. The stock has soared 48.7% year-to-date and has an expected earnings growth rate of 27.69% for this year. It has a Zacks Rank #3 and a Growth Score of A. 

Netflix is considered a pioneer in the streaming space. The company evolved from a small DVD-rental provider to a dominant streaming service provider, courtesy of its wide-ranging content portfolio and a fortified international footprint. The stock gained 43.5% so far this year and has an estimated growth of 27.7%. Netflix currently has a Zacks Rank #3 and a Growth Score of A. 
 

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This article originally published on Zacks Investment Research (zacks.com).

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