AMZN and NVDA: 2 Stocks in QQQ ETF with More Than 30% Upside Potential

AMZN and NVDA: 2 Stocks in QQQ ETF with More Than 30% Upside Potential

  • 17.03.2025 23:14
  • markets.businessinsider.com
  • Keywords: AMZN, NVIDIA

The article highlights Amazon (AMZN) and Nvidia (NVDA), top holdings of the QQQ ETF, with significant upside potential. Despite challenges like tariffs and competition, AMZN benefits from e-commerce dominance and AI growth, while NVDA leverages demand for AI chips and innovation in GPUs. Both stocks are favored by analysts for their long-term growth prospects.

Amazon ServicesNVDAsentiment_satisfied
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Estimated market influence

AMZN

Positivesentiment_satisfied
Analyst rating: N/A

Amazon is highlighted as a top holding with strong growth potential despite recent declines.

NVIDIA

NVIDIA

Positivesentiment_satisfied
Analyst rating: Strong buy

Nvidia is noted for its dominance in AI chips and positive analyst ratings.

Context

Analysis of AMZN and NVDA in QQQ ETF: Business Insights and Market Implications

Key Facts and Data Points

  • Invesco QQQ Trust ETF (QQQ):
    • Tracks the Nasdaq-100 index.
    • Focuses on transformative growth themes like AI, cloud computing, and electric vehicles.
    • Has a Moderate Buy consensus rating with an average price target of $604.13, implying a 25.1% upside potential.

Amazon.com (AMZN)

  • Portfolio Weight: 5.7%
  • Stock Performance:
    • Declined ~10% YTD due to tariff wars, macro uncertainties, and AI competition.
  • Analyst Sentiment:
    • Strong Buy consensus rating with 46 Buys vs. 1 Hold.
    • Average price target: $270.33, implying a 37% upside potential.
  • Key Growth Drivers:
    • E-commerce dominance.
    • Growing advertising revenues.
    • AI-related growth in AWS (Amazon Web Services).
  • Recent Developments:
    • Citi analyst Ronald Josey reaffirmed Buy rating with $273 price target.
    • Alexa+ AI Assistant expected to accelerate GenAI adoption among Prime and Alexa users (nearly 76 million devices in the U.S.).

Nvidia (NVDA)

  • Portfolio Weight: 8.2%
  • Stock Performance:
    • Declined ~9% YTD due to tariff wars, chip export restrictions, and AI competition.
  • Analyst Sentiment:
    • Strong Buy consensus rating with 39 Buys vs. 3 Holds.
    • Average price target: $177.23, implying a 46% upside potential.
  • Key Growth Drivers:
    • Demand for advanced GPUs for AI workloads.
    • Blackwell platform innovation.
    • Leadership in CUDA software platform.
  • Recent Developments:
    • Mizuho analyst Vijay Rakesh reiterated Buy rating but lowered price target to $168 from $175 due to AI space concerns.

Market Trends and Business Impact

  • AI and Cloud Computing Dominance:
    • Both AMZN and NVDA are positioned to benefit from the growing demand for AI technologies.
    • AWS (AMZN) and Nvidia’s GPUs are critical for enterprise AI adoption.
  • Competitive Dynamics:
    • Intense competition in AI is driving innovation but also creating risks.
    • NVDA faces chip export restrictions, while AMZN deals with tariff wars.
  • Long-Term Growth Potential:
    • Both companies are seen as long-term growth plays due to their market leadership and product pipelines.
  • Regulatory Risks:
    • Tariff wars and chip export restrictions pose near-term challenges but may not deter long-term growth.

Strategic Considerations

  • Investor Sentiment:
    • Both stocks have strong buy ratings, indicating confidence in their growth trajectories despite short-term headwinds.
  • Portfolio Impact:
    • AMZN and NVDA together account for ~13.9% of QQQ’s portfolio, making them key drivers of ETF performance.
  • Thematic Investing:
    • Both companies align with transformative themes like cloud computing, AI, and big data, which are expected to drive future growth.

Conclusion

Both AMZN and NVDA are critical components of the QQQ ETF, offering significant upside potential despite near-term challenges. Their dominance in e-commerce, cloud computing, and AI positions them as long-term growth stocks. Investors should consider the regulatory and competitive risks but may find these stocks attractive for their transformative growth prospects.