Why QQQ still has a structural case
1. It's a long-term earnings machine, not a momentum bet. QQQ's underlying portfolio has compounded earnings aggressively — the fund's EPS grew from roughly 267 in FY2022 to 358 in FY2023, 488 in FY2024, and 600 in FY2025, with 2026H1 already at 577. That's a multi-year, durable earnings expansion, which is the foundation any "hold" case ultimately rests on. The index isn't just re-rating on hype; the underlying companies are actually growing profits.
2. The valuation is more reasonable than the "bubble" narrative suggests. On a trailing basis QQQ trades around 6.3x earnings (the fund-level P/E), with a price-to-book near 1.24 and a return on equity above 21%. That's not the profile of a frothy, profitless speculative basket — the constituents are highly profitable and the fund itself is well-capitalized. This matters because a common reason to not hold is valuation, and the numbers here are far from stretched by historical standards.
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