Forecast: This Impressive Vanguard ETF is Set to Outperform the S&P 500 Once More in 2026
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Dec 11 2025
0mins
Source: NASDAQ.COM
S&P 500 Growth Index Overview: The S&P 500 Growth index consists of 216 top-performing growth stocks from the S&P 500, typically yielding higher returns but with increased volatility. The Vanguard S&P 500 Growth ETF, which tracks this index, has outperformed the S&P 500 consistently since its inception.
Performance Comparison: In 2023, the S&P 500 delivered a total return of 17.8%, while the Vanguard S&P 500 Growth ETF achieved a return of 22.7%. The ETF's success is attributed to its significant investments in tech giants like Nvidia and Alphabet, which have driven its performance.
Investment Strategy: The Growth index selects stocks based on momentum and sales growth, rebalancing quarterly to maintain high-performing stocks while avoiding underperformers. This strategy has contributed to the ETF's strong returns compared to the broader S&P 500.
Future Outlook: Analysts predict continued strong performance for the Vanguard ETF in 2026, driven by ongoing advancements in technology sectors such as AI, cloud computing, and potential future growth areas like autonomous vehicles and quantum computing. However, the ETF may experience sharper corrections during market downturns, making it suitable for investors comfortable with volatility.
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Analyst Views on GOOG
Wall Street analysts forecast GOOG stock price to fall
15 Analyst Rating
14 Buy
1 Hold
0 Sell
Strong Buy
Current: 348.780
Low
255.00
Averages
336.08
High
400.00
Current: 348.780
Low
255.00
Averages
336.08
High
400.00
About GOOG
Alphabet Inc. is a holding company. The Company's segments include Google Services, Google Cloud, and Other Bets. The Google Services segment includes products and services such as ads, Android, Chrome, devices, Google Maps, Google Play, Search, and YouTube. The Google Cloud segment includes infrastructure and platform services, collaboration tools, and other services for enterprise customers. Its Other Bets segment is engaged in the sale of healthcare-related services and Internet services. Its Google Cloud provides enterprise-ready cloud services, including Google Cloud Platform and Google Workspace. Google Cloud Platform provides access to solutions such as artificial intelligence (AI) offerings, including its AI infrastructure, Vertex AI platform, and Gemini for Google Cloud; cybersecurity, and data and analytics. Google Workspace includes cloud-based communication and collaboration tools for enterprises, such as Calendar, Gmail, Docs, Drive, and Meet.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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See More
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- Strong Financial Performance: Broadcom reported a 48% year-over-year increase in net revenue to $22.2 billion for Q2 FY2026, with adjusted earnings per share rising 54% to $2.44, showcasing its robust performance in the AI chip market.
- Future Growth Potential: Broadcom expects its AI semiconductor revenue to grow over 200% year-over-year in Q3, significantly accelerating from the 143% growth reported in Q2, suggesting sustained demand in the AI sector.
- Strategic Partnerships: Broadcom has secured a deal with Alphabet to design TPU chips through 2031 and is collaborating with Meta Platforms on AI chip development, highlighting its strong network in the industry and potential for future agreements.
See More
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- Qualcomm Acquisition Talks: Qualcomm is in advanced negotiations to acquire AI chip startup Modular for around $4 billion, aiming to enhance its offerings to better compete with Nvidia, indicating Qualcomm's strategic shift away from traditional handset reliance while challenging Nvidia's dominance in the software ecosystem.
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See More
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- Profit-Taking Phenomenon: The stock's retreat is largely attributed to investors cashing in on profits after the IPO, particularly as the price exceeded $200, prompting early investors to sell and altering the supply-demand dynamics that influenced the stock price.
- Increased Capital Needs: SpaceX announced a $20 billion bond offering to repay its bridge loan, which, despite having over $100 billion on its balance sheet, suggests that its capital requirements may be higher than investors anticipated, adding to market apprehension.
- AI Business Growth Potential: Despite the stock's decline, SpaceX has made significant strides in AI computing, securing a contract with Reflection AI for $150 per month, indicating that its AI division is rapidly becoming a leader in contracted AI compute, with substantial future revenue potential.
See More
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- Financial Performance Overview: SpaceX is projected to achieve $15.5 billion in revenue and $3.8 billion in operating profit in 2025, reflecting strong growth potential in its space and connectivity segments, with an annual revenue growth rate of 36%.
- AI Division Challenges: Despite the AI segment's revenue growth of only 23% in 2025, its operating losses surged to $6.4 billion, indicating that the AI business is not keeping pace with the profitable space and connectivity divisions, which may impact overall investment appeal.
- Market Valuation Analysis: SpaceX's valuation soared from $800 billion pre-IPO to $2.4 trillion post-IPO, primarily driven by expectations of AI growth; however, this high valuation may obscure the profitability of its core businesses.
- Investor Risk Warning: By bundling its profitable space and connectivity businesses with the unprofitable AI division, SpaceX forces investors to bear the risks associated with the AI segment, thereby diminishing the overall investment attractiveness of the company and prompting analysts to adopt a cautious outlook.
See More
Analysis of SpaceX's Market Value Changes Pre and Post IPO
- Market Value Surge: SpaceX's market capitalization skyrocketed from $800 billion before its IPO to $2.4 trillion post-IPO, despite a significant decline in profitability primarily due to the acquisition of a money-losing AI business, raising investor concerns about future earnings potential.
- Profitability Impact: The AI division of SpaceX only achieved a 23% revenue growth between 2024 and 2025, while its operating losses quadrupled to $6.4 billion, indicating not only the unprofitability of the AI segment but also its detrimental effect on the otherwise profitable space and connectivity divisions, impacting overall financial health.
- Business Growth Comparison: Excluding the AI segment, the space and connectivity businesses are projected to generate $15.5 billion in revenue and $3.8 billion in operating profit by 2025, with impressive growth rates of 36% in revenue and 90% in earnings, showcasing their strong market potential.
- Investor Confidence Erosion: By bundling the unprofitable AI business with its profitable segments, Elon Musk has inflated SpaceX's stock price to unreasonable levels, leading many investors to lose confidence in the attractiveness of investing in SpaceX, deeming its stock less appealing.
See More
