Nasdaq 100 The index generally outperforms more diversified indices such as S&P 500 (^GSPC 0.11%) Because about 60% of its portfolio is invested in high-growth technology stocks. But that may be a double-edged sword, as the Nasdaq recently fell 12% from its all-time high during a broader market selloff, while the S&P fell less than 9%.
Many investors have cut their stock exposures amid growing economic uncertainty, partly driven by ongoing geopolitical tensions in the Middle East that have sent oil prices soaring. But looking back throughout history, market selloffs have almost always been great buying opportunities, especially for the high-growth technology sector, which then bounced back with explosive returns.
Vanguard Information Technology ETF (VGT +0.42%) is an exchange-traded fund (ETF) that invests specifically in the information technology sector. Could this be the last long-term buy during a Nasdaq-100 correction?
Image Source: Getty Images.
More trillion-dollar stocks than any other sector
There are 10 companies in the US worth $10 trillion or more, and four of them are from the information technology sector alone. they include:
- NVIDIA (NVDA +2.57%): $4.6 trillion.
- Apple (AAPL +0.00%): $3.8 trillion.
- Microsoft (MSFT 0.60%): $2.8 trillion.
- broadcom (AVGO +4.69%): $1.8 trillion.
The Vanguard Information Technology ETF holds 318 stocks, but the four names above account for 48.6% of the value of its entire portfolio, giving them a significant impact on its performance.
|
store |
Vanguard ETF Portfolio Weighting |
|---|---|
|
1. Nvidia |
18.06% |
|
2. Apple |
15.83% |
|
3. Microsoft |
10.39% |
|
4. Broadcom |
4.34% |
Data Source: Vanguard. Portfolio weightings are accurate as of February 28, 2026 and are subject to change.
Those four stocks have delivered a whopping average return of more than 1,500% over the past decade, and since the Vanguard ETF gives them a much heavier weighting in the comparison. S&P 500 and Nasdaq-100, it’s no surprise that the fund has outperformed both indices over that period.
data by YCharts.
Nvidia, Apple, Microsoft and Broadcom are likely to continue delivering strong returns given their significant roles in artificial intelligence (AI) industry, but many other information technology stocks also have the potential to make significant contributions to the Vanguard ETF going forward.
- micron technologyWhich is one of the world’s leading suppliers of high-bandwidth memory (HBM) for data centers. Its new HBM4 solution will be Power Nvidia’s latest Vera Rubin AI chips.
- Palantir TechnologiesWhich developed a series of AI-powered platforms designed to help businesses and government agencies extract maximum value from their internal data. Its stock isn’t cheap after surging 1,700% since the start of 2023, but it’s full of long-term potential.
- OracleWhich is building the fastest and most cost-effective AI data centers in the industry. despite this Concern about increasing debt on the companyIt could generate significant revenue growth thanks to its impressive customer list, which includes OpenAI. meta platformAnd Elon Musk’s xAI.
Vanguard ETFs can be a great long-term investment
Volatility is a normal part of the investing journey. Over the past 26 years alone, the Nasdaq-100 has never experienced a lower five bear market (decline of 20% or more). Each one was triggered by a completely different economic shock. There was the bursting of the dot-com tech bubble in 2000, the global financial crisis in 2008, the COVID-19 pandemic in 2020, a surge in inflation in 2022, and the Trump administration’s “Liberation Day” tariffs in 2025.
These sharp declines are the price of entry for the opportunity to earn wealth-building returns over the long term. On that note, Vanguard Information Technology ETF Since its inception in 2004, it has delivered a compounded annual return of 13.5%, taking into account sell-offs, corrections and bear markets in each market.
Vanguard Information Technology ETF
today’s change
(0.42%) $3.13
current price
$743.28
key data points
day limit
$740.01 -$747.86
52wk range
$484.86 -$806.99
volume
410K
Industries like AI could remain very supportive of strong returns for the tech sector emerging from the recent market selloff. Before the AI ​​boom, data center operators were spending about $400 billion per year on classical computing infrastructure. according to Nvidia CEO Jensen HuangThose operators may have to spend up to 10 times More than $4 trillion per year on AI infrastructure by 2030, to support growing demand for computing capacity.
But when the AI ​​boom inevitably slows, emerging industries like autonomous vehicles, robotics and even quantum computing could serve as major sources of demand for semiconductor hardware. This means Nvidia, Broadcom, Micron, and advanced precision instruments There could be a very long growth runway from here, which bodes well for the Vanguard ETF.
Anthony Di Pizio No positions in any of the stocks mentioned. The Motley Fool has positions in Advanced Micro Devices, Apple, Broadcom, Meta Platform, Micron Technology, Microsoft, Nvidia, Oracle, and Palantir Technologies and is short shares of Apple. The Motley Fool has one Disclosure Policy.
