Market Update: Nasdaq-100 and Vanguard Mega Cap Growth ETF
The Nasdaq-100 technology index has entered correction territory, currently down about 7.8% amid ongoing tensions in the Middle East. The S&P 500 index is down 5.3% from its all-time high, facing a dip of as much as 9% last week. Investors view this broad market sell-off as a potential buying opportunity for high-quality stocks.
The Vanguard Mega Cap Growth ETF (NYSEMKT: MGK), which tracks the performance of the U.S. Mega Cap Growth Index, invests solely in 60 of the largest U.S. companies, including significant holdings in Nvidia (13.14%), Apple (12.51%), and Alphabet (10.12%). The ETF is currently down 13% from its all-time high and was as low as 17% a week ago. Despite this, it has delivered an annual return of 12.8% since its inception in 2007, with accelerated returns of 22.1% since the AI boom began.
Nvidia’s market capitalization surged from $360 billion at the start of 2023 to $4.3 trillion currently, reflecting the explosive growth of AI technology. The combined market capitalization of Nvidia, Apple, and Alphabet stands at approximately $11.6 trillion. Analysts predict that AI demand could drive Nvidia’s revenue up by 71% to $370 billion for this fiscal year.
