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
Should l Buy GOOG?
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: 395.300
Low
255.00
Averages
336.08
High
400.00
Current: 395.300
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.
SpaceX IPO Expected to Be Historic Event
- Significant Market Impact: SpaceX's anticipated IPO later this year is expected to be one of the largest in history, with a potential market cap of $1.75 trillion, which will significantly impact the market and attract considerable investor interest.
- Potential Gains for Alphabet: Alphabet owns approximately 6% of SpaceX, and should it decide to sell these shares post-IPO, it could yield over $100 billion, providing substantial capital for further investment in its AI infrastructure.
- AI Technology Edge: Alphabet's generative AI model, Gemini, has become widely adopted, and its integration with the Google Search platform positions it as a leader in the AI space, enhancing its competitive advantage.
- Rapid Cloud Computing Growth: Alphabet's Google Cloud reported a 63% year-over-year revenue increase in Q1, partly due to selling its custom AI chips, known as TPUs, to external clients, establishing a strong presence in both cloud services and chip sales, two of the hottest growth sectors.
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Alphabet's AI Growth May Outpace SpaceX's IPO Impact
- SpaceX IPO Impact: The anticipated SpaceX IPO later this year could become one of the largest stock market events ever, and if it achieves a $1.75 trillion market cap, Alphabet stands to gain over $100 billion, significantly enhancing its liquidity.
- AI Technology Edge: Alphabet's generative AI model, Gemini, has become the most widely used AI tool, and its integration with the Google Search platform positions it as the primary means of daily AI interaction, thereby boosting the company's competitive advantage in the AI sector.
- Cloud Computing Growth: Google Cloud's revenue surged 63% year-over-year in Q1, partly due to its sales of custom AI chips, known as TPUs, establishing a strong foothold in both cloud services and chip sales, two of the hottest growth sectors in the economy.
- Capital Restructuring Potential: Should Alphabet sell some of its SpaceX shares post-IPO, it would unlock substantial capital for reinvestment in AI infrastructure, further solidifying its leadership position in the tech industry.
See More
SpaceX IPO Expected to Be Historic Market Event
- Market Size Expectations: SpaceX is expected to conduct its IPO later this year, potentially becoming the largest public company in history with a market cap of $1.75 trillion, drawing significant investor interest.
- Alphabet Investment Opportunity: Alphabet owns approximately 6% of SpaceX, and if SpaceX goes public successfully, it could yield over $100 billion for Alphabet, significantly enhancing its financial strength and supporting its AI infrastructure development.
- AI Technology Advantage: Alphabet's generative AI model, Gemini, has become widely used, and its integration with the Google Search platform positions it as a leader in the AI space, further solidifying its market position.
- Cloud Computing Growth: Alphabet's Google Cloud achieved a remarkable 63% year-over-year growth in Q1, partly due to selling its custom AI chips, TPUs, to external clients, allowing it to thrive in both cloud computing and chip sales, two of the fastest-growing sectors.
See More
Amazon Positioned to Outperform S&P 500
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- Chip Business Surge: Amazon's chip division has reached a $20 billion annual run-rate, potentially hitting $50 billion with internal usage, as rising data center spending enhances its AI infrastructure investments, significantly reducing inference costs and boosting profitability.
- Agentic AI Advantage: By collaborating with OpenAI on the BedRock platform, Amazon has strengthened its position in the agentic AI space, while its developed Model Context Protocol (MCP) is set to optimize e-commerce operations, enhancing customer experience and operational efficiency.
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- Missing AI Ecosystem Players: Amazon, Alphabet, and Meta play crucial roles in the AI ecosystem, yet their absence from the top holdings of the Vanguard Information Technology ETF due to revenue classification may lead investors to overlook significant opportunities.
- Market Share Insight: With Amazon and Alphabet's cloud platforms collectively holding a 42% market share, their exclusion would leave the AI ecosystem lacking critical infrastructure, potentially stunting industry growth.
- Capital Expenditure Expectations: These three companies are projected to spend between $500 billion and $530 billion in capital expenditures in 2023, with a significant portion allocated to AI initiatives, underscoring their pivotal role in advancing AI technology.
- Investment Strategy Shift: Rather than investing in the Vanguard Information Technology ETF, opting for a Nasdaq-100 ETF like the Invesco QQQ Trust ETF would provide better exposure to the AI sector, as it includes these key players along with other tech giants.
See More
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- Tech ETF Overview: The Vanguard Information Technology ETF (VGT) shows a +2.69% change with a current price of $112.44 and a trading volume of 3.9 million shares, indicating sustained investor interest in tech stocks, yet it lacks key AI players in its top holdings.
- Holdings Structure Analysis: Over 44% of VGT's top holdings are concentrated in Nvidia, Apple, and Microsoft, while missing Amazon, Alphabet, and Meta, which play crucial roles in the AI ecosystem, highlighting potential missed investment opportunities.
- Missing AI Infrastructure: Amazon and Alphabet together hold a 42% market share in global cloud platforms, and their absence would deprive the AI ecosystem of critical infrastructure, impacting the potential for future AI development.
- Better Investment Options: Given VGT's limitations, investors should consider the Invesco QQQ Trust ETF, which includes Nvidia, Microsoft, and other heavyweight companies in the AI sector, providing a more comprehensive exposure to AI investments.
See More
SpaceX IPO Expected to Be Historic Event
- Significant Market Impact: SpaceX's anticipated IPO later this year is expected to be one of the largest in history, with a potential market cap of $1.75 trillion, which will significantly impact the market and attract considerable investor interest.
- Potential Gains for Alphabet: Alphabet owns approximately 6% of SpaceX, and should it decide to sell these shares post-IPO, it could yield over $100 billion, providing substantial capital for further investment in its AI infrastructure.
- AI Technology Edge: Alphabet's generative AI model, Gemini, has become widely adopted, and its integration with the Google Search platform positions it as a leader in the AI space, enhancing its competitive advantage.
- Rapid Cloud Computing Growth: Alphabet's Google Cloud reported a 63% year-over-year revenue increase in Q1, partly due to selling its custom AI chips, known as TPUs, to external clients, establishing a strong presence in both cloud services and chip sales, two of the hottest growth sectors.
See More
Alphabet's AI Growth May Outpace SpaceX's IPO Impact
- SpaceX IPO Impact: The anticipated SpaceX IPO later this year could become one of the largest stock market events ever, and if it achieves a $1.75 trillion market cap, Alphabet stands to gain over $100 billion, significantly enhancing its liquidity.
- AI Technology Edge: Alphabet's generative AI model, Gemini, has become the most widely used AI tool, and its integration with the Google Search platform positions it as the primary means of daily AI interaction, thereby boosting the company's competitive advantage in the AI sector.
- Cloud Computing Growth: Google Cloud's revenue surged 63% year-over-year in Q1, partly due to its sales of custom AI chips, known as TPUs, establishing a strong foothold in both cloud services and chip sales, two of the hottest growth sectors in the economy.
- Capital Restructuring Potential: Should Alphabet sell some of its SpaceX shares post-IPO, it would unlock substantial capital for reinvestment in AI infrastructure, further solidifying its leadership position in the tech industry.
See More
SpaceX IPO Expected to Be Historic Market Event
- Market Size Expectations: SpaceX is expected to conduct its IPO later this year, potentially becoming the largest public company in history with a market cap of $1.75 trillion, drawing significant investor interest.
- Alphabet Investment Opportunity: Alphabet owns approximately 6% of SpaceX, and if SpaceX goes public successfully, it could yield over $100 billion for Alphabet, significantly enhancing its financial strength and supporting its AI infrastructure development.
- AI Technology Advantage: Alphabet's generative AI model, Gemini, has become widely used, and its integration with the Google Search platform positions it as a leader in the AI space, further solidifying its market position.
- Cloud Computing Growth: Alphabet's Google Cloud achieved a remarkable 63% year-over-year growth in Q1, partly due to selling its custom AI chips, TPUs, to external clients, allowing it to thrive in both cloud computing and chip sales, two of the fastest-growing sectors.
See More
Amazon Positioned to Outperform S&P 500
- Cloud Growth Acceleration: Amazon Web Services (AWS) reported a 28% revenue increase to $37.6 billion in Q1, marking its fastest growth in nearly four years, indicating a strengthening competitive position in the cloud market that is expected to drive overall performance.
- Chip Business Surge: Amazon's chip division has reached a $20 billion annual run-rate, potentially hitting $50 billion with internal usage, as rising data center spending enhances its AI infrastructure investments, significantly reducing inference costs and boosting profitability.
- Agentic AI Advantage: By collaborating with OpenAI on the BedRock platform, Amazon has strengthened its position in the agentic AI space, while its developed Model Context Protocol (MCP) is set to optimize e-commerce operations, enhancing customer experience and operational efficiency.
- Strong E-commerce Platform: Amazon's e-commerce segment is achieving significant efficiency gains through robotics and AI, which, while AWS garners much attention, positions the e-commerce business for substantial profitability growth, providing a continuous growth driver for the company.
See More
Caution Advised for Tech ETF Investments
- Missing AI Ecosystem Players: Amazon, Alphabet, and Meta play crucial roles in the AI ecosystem, yet their absence from the top holdings of the Vanguard Information Technology ETF due to revenue classification may lead investors to overlook significant opportunities.
- Market Share Insight: With Amazon and Alphabet's cloud platforms collectively holding a 42% market share, their exclusion would leave the AI ecosystem lacking critical infrastructure, potentially stunting industry growth.
- Capital Expenditure Expectations: These three companies are projected to spend between $500 billion and $530 billion in capital expenditures in 2023, with a significant portion allocated to AI initiatives, underscoring their pivotal role in advancing AI technology.
- Investment Strategy Shift: Rather than investing in the Vanguard Information Technology ETF, opting for a Nasdaq-100 ETF like the Invesco QQQ Trust ETF would provide better exposure to the AI sector, as it includes these key players along with other tech giants.
See More
Risks and Opportunities in Tech ETF Investments
- Tech ETF Overview: The Vanguard Information Technology ETF (VGT) shows a +2.69% change with a current price of $112.44 and a trading volume of 3.9 million shares, indicating sustained investor interest in tech stocks, yet it lacks key AI players in its top holdings.
- Holdings Structure Analysis: Over 44% of VGT's top holdings are concentrated in Nvidia, Apple, and Microsoft, while missing Amazon, Alphabet, and Meta, which play crucial roles in the AI ecosystem, highlighting potential missed investment opportunities.
- Missing AI Infrastructure: Amazon and Alphabet together hold a 42% market share in global cloud platforms, and their absence would deprive the AI ecosystem of critical infrastructure, impacting the potential for future AI development.
- Better Investment Options: Given VGT's limitations, investors should consider the Invesco QQQ Trust ETF, which includes Nvidia, Microsoft, and other heavyweight companies in the AI sector, providing a more comprehensive exposure to AI investments.
See More
