XLK vs QQQ Stock Comparison: AI Score, Valuation, Performance and Upside
XLK (Technology Select Sector SPDR) and QQQ (Invesco QQQ) are both technology-focused ETFs but defined differently — XLK holds only GICS technology sector companies from the S&P 500 at ultra-low cost, while QQQ tracks the 100 largest Nasdaq-listed companies including Alphabet, Amazon, Meta, and Tesla that fall outside the GICS technology sector definition. QQQ offers broader exposure with institutional options liquidity; XLK offers purer technology sector exposure at lower cost.
XLK vs QQQ is GICS technology sector purity (S&P 500 tech companies only, maximum Apple and Microsoft weight) versus Nasdaq-100 breadth (largest 100 Nasdaq companies including GICS communication services, consumer discretionary, and healthcare alongside tech) — the difference between a sector ETF and an index ETF that both feel like technology funds.
XLK holds the edge across 3 of 5 key metrics in this comparison. XLK has delivered stronger 1-year price return (+59.38% vs +40.68% for QQQ).
- →Want pure GICS information technology sector exposure from the S&P 500 at ultra-low cost (0.09%) for sector rotation or benchmark-relative overweight in technology
- →Prefer the highest concentration in Apple and Microsoft, which together often represent 40%+ of XLK's portfolio as the two largest technology sector companies
- →Accept that XLK excludes Alphabet, Amazon, Meta, and Tesla (which are classified in communication services and consumer discretionary sectors) for the benefit of sector purity
- →Want the full technology ecosystem including Alphabet (Google/AI), Amazon (AWS cloud), Meta (social media/AI), and Tesla alongside traditional technology sector companies in one ETF
- →Value QQQ's institutional options market liquidity for hedging, covered call strategies, or options income — QQQ has among the deepest options markets of any ETF
- →Accept a slightly higher expense ratio (0.20% vs 0.09%) for the broader Nasdaq-100 company exposure and decades of established ETF track record
| Metric | XLK | QQQ |
|---|---|---|
| ETF score | 87.0 | 84.0 |
| Latest close | $191.44 | $740.62 |
| 1M return | +10.51% | +5.57% |
| 6M return | +37.72% | +23.67% |
| 1Y return | +59.38% | +40.68% |
How much would $10,000 be worth today if invested at the start of each period, with all dividends reinvested?
| Period | XLK | QQQ |
|---|---|---|
| 1Y ago | $16.03K (+60.3%) started 2025-06-18 | $14.14K (+41.4%) started 2025-06-18 |
| 5Y ago | $29.1K (+191.0%) started 2021-06-18 | $22.96K (+129.6%) started 2021-06-18 |
| 10Y ago | $109.63K (+996.3%) started 2016-06-20 | $79.38K (+693.8%) started 2016-06-20 |
Hypothetical — past performance does not guarantee future results.
| Metric | XLK | QQQ |
|---|---|---|
| Expense ratio | 0.08% | 0.18% |
| Total assets (AUM) | $124.52B | $493.99B |
| Dividend yield | 0.40% | 0.38% |
| Trailing P/E | 38.15 | 34.00 |
| Beta | 1.34 | 1.23 |
| 52-week change | 59.38% | 40.68% |
| Metric | XLK | QQQ |
|---|---|---|
| 1Y return | +59.38% | +40.68% |
| 6M return | +37.72% | +23.67% |
| 1M return | +10.51% | +5.57% |
| 1Y Sharpe ratio | 1.95 | 1.78 |
| Beta | 1.34 | 1.23 |
| Dividend yield | 0.40% | 0.38% |
| 5Y CAGR | +22.86% | +17.37% |
Lower drawdown and smaller single-period drops generally indicate a smoother ride, though they do not guarantee lower future risk.
| Period | Metric | XLK | QQQ |
|---|---|---|---|
| 1Y | Growth | +59.38% | +40.68% |
| CAGR | +59.43% | +40.72% | |
| Sharpe ratio | 1.95 | 1.78 | |
| Max drawdown | 15.92% | 11.96% | |
| Max daily drop | 6.66% | 4.80% | |
| Max wkly drop | 9.99% | 6.79% | |
| 5Y | Growth | +179.95% | +122.74% |
| CAGR | +22.86% | +17.37% | |
| Sharpe ratio | 0.77 | 0.63 | |
| Max drawdown | 33.56% | 35.12% | |
| Max daily drop | 6.82% | 6.21% | |
| Max wkly drop | 13.59% | 11.98% | |
| 10Y | Growth | +882.72% | +639.84% |
| CAGR | +25.69% | +22.17% | |
| Sharpe ratio | 0.87 | 0.81 | |
| Max drawdown | 33.56% | 35.12% | |
| Max daily drop | 13.81% | 11.98% | |
| Max wkly drop | 17.04% | 16.20% |
| Category | XLK | QQQ |
|---|---|---|
| Fund name | State Street Technology Select Sector SPDR ETF | Invesco QQQ Trust |
| Type | ETF | ETF |
| Expense ratio | 0.08% | 0.18% |
| Total assets (AUM) | $124.52B | $493.99B |
| Dividend yield | 0.40% | 0.38% |
- →Pure information technology sector exposure — XLK holds only GICS technology sector companies, excluding consumer discretionary (Amazon, Tesla), communication services (Alphabet, Meta), and healthcare companies that QQQ includes
- →Ultra-low cost (0.09%) makes XLK the cheapest way to gain pure S&P 500 technology sector exposure through a large, liquid ETF
- →Apple and Microsoft weighting is very high (often combined 40%+) — for investors wanting the most concentrated bet on these two companies within a technology ETF
- →Includes all major technology ecosystem companies — QQQ holds Alphabet (Google), Amazon (AWS cloud), Meta (social media/AI), and Tesla alongside traditional GICS technology companies that XLK holds
- →Institutional options and derivatives market — QQQ has the deepest options liquidity of any sector ETF, making it the preferred hedging and options income vehicle for institutional portfolios
- →Decades of track record (launched 1999) with one of the largest ETF assets under management — high liquidity and widespread recognition among investors and advisors
- →GICS reclassification risk — Alphabet and Meta were moved from technology to communication services in 2018, removing them from XLK and significantly changing the ETF's composition
- →Apple and Microsoft concentration (often 40-45% combined) means XLK performance is heavily determined by just two companies
- →No consumer discretionary or communication services exposure — XLK misses Amazon (cloud, retail), Alphabet (search, AI), and Meta (social media) that QQQ includes
- →Higher expense ratio (0.20%) versus XLK's 0.09% — for long-term holders, QQQ costs 0.11% more annually
- →Nasdaq listing requirement rather than GICS sector purity — some non-technology companies (Costco, Starbucks, Mondelez) are included simply because they list on Nasdaq
- →Tesla and consumer discretionary exposure may not be desired by investors specifically seeking technology sector allocation — QQQ's sector mix is broader than a pure technology bet
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