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 (+34.18% vs +22.35% 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 | 83.0 | 75.0 |
| Latest close | $175.35 | $687.99 |
| 1M return | -5.53% | -5.13% |
| 6M return | +19.68% | +9.56% |
| 1Y return | +34.18% | +22.35% |
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 | $13.49K (+34.9%) started 2025-07-31 | $12.29K (+22.9%) started 2025-07-31 |
| 5Y ago | $24.75K (+147.5%) started 2021-08-02 | $20.04K (+100.4%) started 2021-08-02 |
| 10Y ago | $93.51K (+835.1%) started 2016-08-01 | $68.37K (+583.7%) started 2016-08-01 |
Hypothetical — past performance does not guarantee future results.
| Metric | XLK | QQQ |
|---|---|---|
| Expense ratio | 0.08% | 0.18% |
| Total assets (AUM) | $123.91B | $490.1B |
| Dividend yield | 0.42% | 0.41% |
| Trailing P/E | N/A | 31.07 |
| Beta | 1.35 | 1.24 |
| 52-week change | 34.18% | 22.35% |
| Metric | XLK | QQQ |
|---|---|---|
| 1Y return | +34.18% | +22.35% |
| 6M return | +19.68% | +9.56% |
| 1M return | -5.53% | -5.13% |
| 1Y Sharpe ratio | 1.11 | 0.91 |
| Beta | 1.35 | 1.24 |
| Dividend yield | 0.42% | 0.41% |
| 5Y CAGR | +18.98% | +14.24% |
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 | +34.18% | +22.35% |
| CAGR | +34.21% | +22.37% | |
| Sharpe ratio | 1.11 | 0.91 | |
| Max drawdown | 15.92% | 11.96% | |
| Max daily drop | 6.66% | 4.80% | |
| Max wkly drop | 9.99% | 6.79% | |
| 5Y | Growth | +138.22% | +94.44% |
| CAGR | +18.98% | +14.24% | |
| Sharpe ratio | 0.63 | 0.50 | |
| Max drawdown | 33.56% | 35.12% | |
| Max daily drop | 6.82% | 6.21% | |
| Max wkly drop | 13.59% | 11.98% | |
| 10Y | Growth | +737.10% | +536.47% |
| CAGR | +23.68% | +20.34% | |
| Sharpe ratio | 0.80 | 0.74 | |
| 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 | Invesco QQQ Trust |
| Type | ETF | ETF |
| Expense ratio | 0.08% | 0.18% |
| Total assets (AUM) | $123.91B | $490.1B |
| Dividend yield | 0.42% | 0.41% |
- →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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