Passive Investments Surpass Active for the First Time
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1 hour ago
0mins
Source: Fool
- Passive Investment Trend: In 2023, money in U.S. passive equity investment vehicles surpassed that in active funds for the first time, reflecting a growing preference for passive strategies amid strong market performance.
- QQQ's Outstanding Performance: The Invesco QQQ Trust has achieved a total return of 642% over the past decade, meaning a $10,000 investment in June 2016 would be worth approximately $74,000 today, translating to a 22% annualized return, showcasing the strength of tech stocks.
- Tech Stocks Driving Growth: The so-called 'Magnificent Seven' tech companies have a combined market capitalization of $22 trillion, accounting for 34% of the S&P 500, with their growth directly boosting QQQ, particularly through leaders like Nvidia in the AI sector.
- Optimistic Future Outlook: Although QQQ is trading at record highs, investor sentiment remains bullish for the next decade, especially with ongoing investments in AI infrastructure expected to further drive market growth.
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Analyst Views on NVDA
Wall Street analysts forecast NVDA stock price to rise
41 Analyst Rating
39 Buy
1 Hold
1 Sell
Strong Buy
Current: 204.650
Low
200.00
Averages
264.97
High
352.00
Current: 204.650
Low
200.00
Averages
264.97
High
352.00
About NVDA
NVIDIA Corporation is an artificial intelligence (AI) infrastructure company. The Company is engaged in accelerated computing to help solve the challenging computational problems. Its segments include Compute & Networking and Graphics. The Compute & Networking segment includes its Data Center accelerated computing and networking platforms and AI solutions and software, and automotive platforms and autonomous and electric vehicle solutions, including software. The Graphics segment includes GeForce GPUs for gaming and personal computers (PCs), and Quadro/NVIDIA RTX GPUs for enterprise workstation graphics. Its technology stack includes the foundational NVIDIA CUDA development platform that runs on all NVIDIA GPUs, as well as hundreds of domain-specific software libraries, frameworks, algorithms, software development kits (SDKs), and application programming interfaces (APIs). Its platforms address four markets, which include Data Center, Gaming, Professional Visualization, and Automotive.
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.
United States Oil Fund Returns Just 22% Over a Decade
- Return Analysis: Over the past decade, the United States Oil Fund (USO) has only achieved a total return of 22.46%, while crude oil prices surged from $16.55 to $114.84, indicating that investors failed to effectively capture price movements, reflecting the fund's structural costs.
- Futures Roll Decay: USO rolls its front-month NYMEX WTI futures contracts monthly, and when the futures curve is in contango, the fund sells the cheaper expiring contract and buys the more expensive next one, leading to a monthly bleed in net asset value (NAV) even when spot crude prices remain flat.
- Tax Complexity: As a commodity pool limited partnership, USO investors receive a K-1 tax form, with long-term gains taxed at 60% and short-term gains at 40%, regardless of holding period, which adds unexpected accounting costs for investors.
- Market Risk Warning: As of June 17, 2026, USO is up 65.17% year-to-date, but analysts warn that if the Strait of Hormuz reopens, crude futures could quickly decline, erasing USO's yield advantage, with a 14.94% drop in the past week already observed.
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Nvidia Launches Vera CPU Platform, Tapping into $200 Billion Market
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- Comprehensive Product Offering: The Vera CPU, combined with Nvidia's GPUs, networking, and CUDA software, creates a complete ecosystem that allows the company to capture incremental value from each AI deployment, thereby increasing customer loyalty.
- Optimistic Revenue Projections: CFO Colette Kress stated that total CPU revenue is expected to reach nearly $20 billion this year, indicating that the Vera CPU is already being viewed as a strong alternative for AI infrastructure build-outs.
- Accelerated Strategic Transformation: The introduction of the Vera CPU marks Nvidia's evolution from a GPU supplier to a full-stack AI infrastructure provider, enhancing its market share and customer attachment rates in AI data centers.
See More
Passive Investments Surpass Active for the First Time
- Passive Investment Trend: In 2023, money in U.S. passive equity investment vehicles surpassed that in active funds for the first time, reflecting a growing preference for passive strategies amid strong market performance.
- QQQ's Outstanding Performance: The Invesco QQQ Trust has achieved a total return of 642% over the past decade, meaning a $10,000 investment in June 2016 would be worth approximately $74,000 today, translating to a 22% annualized return, showcasing the strength of tech stocks.
- Tech Stocks Driving Growth: The so-called 'Magnificent Seven' tech companies have a combined market capitalization of $22 trillion, accounting for 34% of the S&P 500, with their growth directly boosting QQQ, particularly through leaders like Nvidia in the AI sector.
- Optimistic Future Outlook: Although QQQ is trading at record highs, investor sentiment remains bullish for the next decade, especially with ongoing investments in AI infrastructure expected to further drive market growth.
See More
Micron Technology's Fiscal Q3 Outlook Highlights
- Record Revenue Guidance: Micron expects fiscal Q3 revenue to reach approximately $33.5 billion, reflecting a 40% increase from the previous quarter, which not only surpasses total revenue for any full year through fiscal 2024 but also underscores the company's robust growth potential in the AI-driven market.
- Gross Margin Target: Management anticipates a record non-GAAP gross margin of about 81%, which, if achieved, would further solidify Micron's leadership in the memory chip market and enhance investor confidence in the company's financial health.
- Supply and Demand Constraints: Micron has finalized agreements for its 2026 high-bandwidth memory pricing and volume, expecting that both DRAM and NAND demand will be constrained by supply, a situation likely to persist into 2027, which could significantly impact future pricing dynamics.
- Capital Expenditure Plans: The company is investing tens of billions in new factories, including an Idaho facility expected to begin initial wafer production in mid-2027, laying the groundwork for future capacity growth, although short-term supply constraints are expected to remain a challenge.
See More
Invesco QQQ Trust Shows Strong Performance
- Annualized Return: Since June 2016, the Invesco QQQ Trust has achieved an impressive annualized total return of 22%, indicating strong performance that has drawn significant investor interest, particularly amid the rise of passive investment vehicles.
- Investment Growth: An investment of $10,000 in QQQ in June 2016 would have grown to approximately $74,000 today, reflecting a staggering cumulative return of 642%, driven largely by the robust growth of technology stocks, especially the 'Magnificent Seven'.
- Market Dominance: These seven tech giants boast a combined market capitalization of $22 trillion, accounting for 34% of the S&P 500, with their strong performance providing substantial support for QQQ's growth, particularly fueled by advancements in artificial intelligence.
- Future Outlook: Despite QQQ trading at record highs, analysts remain bullish about its prospects over the next decade, especially with the ongoing development of AI technologies, suggesting that investors can expect continued long-term growth potential.
See More
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- Record Gross Margin: The company expects a non-GAAP gross margin of 81%, marking a new high that indicates Micron's ability to maintain high profitability levels amidst ongoing supply-demand tensions, thereby enhancing its competitive edge in the market.
- Sustained Capacity Constraints: Micron has completed agreements for pricing and volume for its 2026 high-bandwidth memory, expecting that demand for DRAM and NAND will be constrained by supply, a trend projected to continue into 2027, further driving price increases.
- Investor Signal Monitoring: While current supply-demand dynamics remain tight, management's outlook on pricing for 2027 will be a focal point for investors, as any hints that prices may not continue to rise could raise market concerns and impact stock performance.
See More
United States Oil Fund Returns Just 22% Over a Decade
- Return Analysis: Over the past decade, the United States Oil Fund (USO) has only achieved a total return of 22.46%, while crude oil prices surged from $16.55 to $114.84, indicating that investors failed to effectively capture price movements, reflecting the fund's structural costs.
- Futures Roll Decay: USO rolls its front-month NYMEX WTI futures contracts monthly, and when the futures curve is in contango, the fund sells the cheaper expiring contract and buys the more expensive next one, leading to a monthly bleed in net asset value (NAV) even when spot crude prices remain flat.
- Tax Complexity: As a commodity pool limited partnership, USO investors receive a K-1 tax form, with long-term gains taxed at 60% and short-term gains at 40%, regardless of holding period, which adds unexpected accounting costs for investors.
- Market Risk Warning: As of June 17, 2026, USO is up 65.17% year-to-date, but analysts warn that if the Strait of Hormuz reopens, crude futures could quickly decline, erasing USO's yield advantage, with a 14.94% drop in the past week already observed.
See More
Nvidia Launches Vera CPU Platform, Tapping into $200 Billion Market
- Market Opportunity Expansion: Nvidia's newly launched Vera CPU platform is purpose-built for emerging agentic AI technology, expected to unlock a $200 billion market, significantly enhancing its competitive position in AI infrastructure.
- Comprehensive Product Offering: The Vera CPU, combined with Nvidia's GPUs, networking, and CUDA software, creates a complete ecosystem that allows the company to capture incremental value from each AI deployment, thereby increasing customer loyalty.
- Optimistic Revenue Projections: CFO Colette Kress stated that total CPU revenue is expected to reach nearly $20 billion this year, indicating that the Vera CPU is already being viewed as a strong alternative for AI infrastructure build-outs.
- Accelerated Strategic Transformation: The introduction of the Vera CPU marks Nvidia's evolution from a GPU supplier to a full-stack AI infrastructure provider, enhancing its market share and customer attachment rates in AI data centers.
See More
Passive Investments Surpass Active for the First Time
- Passive Investment Trend: In 2023, money in U.S. passive equity investment vehicles surpassed that in active funds for the first time, reflecting a growing preference for passive strategies amid strong market performance.
- QQQ's Outstanding Performance: The Invesco QQQ Trust has achieved a total return of 642% over the past decade, meaning a $10,000 investment in June 2016 would be worth approximately $74,000 today, translating to a 22% annualized return, showcasing the strength of tech stocks.
- Tech Stocks Driving Growth: The so-called 'Magnificent Seven' tech companies have a combined market capitalization of $22 trillion, accounting for 34% of the S&P 500, with their growth directly boosting QQQ, particularly through leaders like Nvidia in the AI sector.
- Optimistic Future Outlook: Although QQQ is trading at record highs, investor sentiment remains bullish for the next decade, especially with ongoing investments in AI infrastructure expected to further drive market growth.
See More
Micron Technology's Fiscal Q3 Outlook Highlights
- Record Revenue Guidance: Micron expects fiscal Q3 revenue to reach approximately $33.5 billion, reflecting a 40% increase from the previous quarter, which not only surpasses total revenue for any full year through fiscal 2024 but also underscores the company's robust growth potential in the AI-driven market.
- Gross Margin Target: Management anticipates a record non-GAAP gross margin of about 81%, which, if achieved, would further solidify Micron's leadership in the memory chip market and enhance investor confidence in the company's financial health.
- Supply and Demand Constraints: Micron has finalized agreements for its 2026 high-bandwidth memory pricing and volume, expecting that both DRAM and NAND demand will be constrained by supply, a situation likely to persist into 2027, which could significantly impact future pricing dynamics.
- Capital Expenditure Plans: The company is investing tens of billions in new factories, including an Idaho facility expected to begin initial wafer production in mid-2027, laying the groundwork for future capacity growth, although short-term supply constraints are expected to remain a challenge.
See More
Invesco QQQ Trust Shows Strong Performance
- Annualized Return: Since June 2016, the Invesco QQQ Trust has achieved an impressive annualized total return of 22%, indicating strong performance that has drawn significant investor interest, particularly amid the rise of passive investment vehicles.
- Investment Growth: An investment of $10,000 in QQQ in June 2016 would have grown to approximately $74,000 today, reflecting a staggering cumulative return of 642%, driven largely by the robust growth of technology stocks, especially the 'Magnificent Seven'.
- Market Dominance: These seven tech giants boast a combined market capitalization of $22 trillion, accounting for 34% of the S&P 500, with their strong performance providing substantial support for QQQ's growth, particularly fueled by advancements in artificial intelligence.
- Future Outlook: Despite QQQ trading at record highs, analysts remain bullish about its prospects over the next decade, especially with the ongoing development of AI technologies, suggesting that investors can expect continued long-term growth potential.
See More
Micron Technology's Stock Soars 300% Amid AI Boom
- Revenue Surge Expected: Micron Technology anticipates third-quarter fiscal 2026 revenue to reach $33.5 billion, representing a 40% increase from the previous quarter, which not only surpasses the total revenue for fiscal 2024 but also highlights the company's robust growth potential driven by AI.
- Record Gross Margin: The company expects a non-GAAP gross margin of 81%, marking a new high that indicates Micron's ability to maintain high profitability levels amidst ongoing supply-demand tensions, thereby enhancing its competitive edge in the market.
- Sustained Capacity Constraints: Micron has completed agreements for pricing and volume for its 2026 high-bandwidth memory, expecting that demand for DRAM and NAND will be constrained by supply, a trend projected to continue into 2027, further driving price increases.
- Investor Signal Monitoring: While current supply-demand dynamics remain tight, management's outlook on pricing for 2027 will be a focal point for investors, as any hints that prices may not continue to rise could raise market concerns and impact stock performance.
See More
