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 (+41.93% vs +26.03% 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 scorei | 90.0 | 86.0 |
| Latest closei | $196.27 | $744.50 |
| 1M returni | +7.47% | +4.77% |
| 6M returni | +51.43% | +32.62% |
| 1Y returni | +41.93% | +26.03% |
The ETF score weights long-term returns and risk-adjusted performance most heavily, but still rewards low expense ratios, larger fund size, and broader diversification — so it can favor low-cost, broad, mega-cap funds over smaller thematic or actively-managed funds even when the latter have delivered stronger returns.
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 | $14.26K (+42.6%) started 2025-09-25 | $12.66K (+26.6%) started 2025-09-25 |
| 5Y ago | $27.25K (+172.5%) started 2021-09-27 | $21.35K (+113.5%) started 2021-09-27 |
| 10Y ago | $102.53K (+925.3%) started 2016-09-26 | $72.82K (+628.2%) started 2016-09-26 |
Hypothetical — past performance does not guarantee future results.
| Metric | XLK | QQQ |
|---|---|---|
| Expense ratioi | 0.08% | 0.18% |
| Total assets (AUM)i | $121.44B | $488.98B |
| Dividend yieldi | 0.43% | 0.42% |
| Trailing P/Ei | 34.74 | 30.34 |
| Betai | 1.36 | 1.24 |
| 52-week change | 41.93% | 26.03% |
| Metric | XLK | QQQ |
|---|---|---|
| 1Y returni | +41.93% | +26.03% |
| 6M returni | +51.43% | +32.62% |
| 1M returni | +7.47% | +4.77% |
| 1Y Sharpe ratio | 1.29 | 1.04 |
| Betai | 1.36 | 1.24 |
| Dividend yieldi | 0.43% | 0.42% |
| 5Y CAGR | +21.32% | +15.70% |
Over the past year, XLK and QQQ have moved strongly in the same direction (correlation of 0.96), based on daily returns.
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 | Growthi | +41.93% | +26.03% |
| CAGRi | +41.96% | +26.05% | |
| Volatilityi | 26.45% | 19.89% | |
| Sharpe ratioi | 1.29 | 1.04 | |
| Sortino ratioi | 1.89 | 1.52 | |
| Max drawdowni | 15.92% | 11.96% | |
| Current drawdowni | 0.75% | 0.40% | |
| Avg drawdowni | 5.15% | 3.14% | |
| Ulcer Indexi | 6.27% | 4.00% | |
| Max daily dropi | 6.66% | 4.80% | |
| Max wkly dropi | 9.99% | 6.79% | |
| 5Y | Growthi | +162.46% | +107.13% |
| CAGRi | +21.32% | +15.70% | |
| Volatilityi | 25.98% | 23.01% | |
| Sharpe ratioi | 0.70 | 0.56 | |
| Sortino ratioi | 1.02 | 0.80 | |
| Max drawdowni | 33.56% | 35.12% | |
| Current drawdowni | 0.75% | 0.40% | |
| Avg drawdowni | 8.58% | 9.17% | |
| Ulcer Indexi | 12.23% | 13.59% | |
| Max daily dropi | 6.82% | 6.21% | |
| Max wkly dropi | 13.59% | 11.98% | |
| 10Y | Growthi | +820.94% | +578.95% |
| CAGRi | +24.87% | +21.12% | |
| Volatilityi | 25.02% | 22.55% | |
| Sharpe ratioi | 0.84 | 0.77 | |
| Sortino ratioi | 1.20 | 1.08 | |
| Max drawdowni | 33.56% | 35.12% | |
| Current drawdowni | 0.75% | 0.40% | |
| Avg drawdowni | 6.01% | 6.23% | |
| Ulcer Indexi | 9.62% | 10.38% | |
| Max daily dropi | 13.81% | 11.98% | |
| Max wkly dropi | 17.04% | 16.20% |
| Category | XLK | QQQ |
|---|---|---|
| Fund name | State Street Technology Select Sector SPDR ETF | Invesco QQQ Trust |
| Type | ETF | ETF |
| Expense ratioi | 0.08% | 0.18% |
| Total assets (AUM)i | $121.44B | $488.98B |
| Dividend yieldi | 0.43% | 0.42% |
- 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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