Nasdaq-100 Enters Correction; Tech ETFs Offer Recovery Hope

Nasdaq-100 faces correction but tech ETFs like iShares could thrive. Investors may find attractive opportunities in AI-driven tech stocks, aiding recovery strategies.

Date: 19-03-2025

AI Rating: 6

**Tech Stocks Enter Correction**: The recent decline of over 14% in the Nasdaq-100 indicates significant market volatility, particularly affecting companies at the forefront of the AI revolution. The opportunity for recovery exists, with a shift towards tech-focused ETFs proving to be a potential strategy for investors aiming for diversified exposure.

**ETF Holdings**: The iShares Expanded Tech Sector ETF contains substantial holdings in influential companies, including Meta Platforms, Apple, Microsoft, and Nvidia. These firms are heavily invested in AI, enhancing their capabilities and products through technology, positioning the ETF as a significant player in capturing future growth.

**Investment Performance**: The ETF has historically generated a compound annual return of 10.8% since its inception, with a remarkable 19.5% return over the last decade. This sustained performance coupled with ongoing growth trends in AI industries indicates promising future gains, although past performance is not a guaranteed predictor of future results.

**Nvidia's Revenue Performance**: It's noted that Nvidia experienced a revenue surge of 114% in fiscal 2025, but projections indicate this growth is set to decelerate significantly in the coming years (to 56% in fiscal 2026 and 23% in fiscal 2027). Such trends highlight the potential risk of slowdown in tech stock performance, but they also underscore the continuing demand in the AI sector.

**AI Dependency and Future Outlook**: The prospect of companies leveraging AI for growth, particularly within software development, presents an optimistic outlook for the ETF. However, as acknowledged in the report, a downturn or insufficient growth in the AI market could adversely affect investors’ returns on the ETF.

Stocks: META AAPL MSFT NVDA AVGO