Invesco QQQ ETF: Moderate Buy with 7.69% Upside Potential

The Invesco QQQ ETF is up 0.60% over the past five days and 10.81% year-to-date. The TipRanks analyst consensus rates QQQ as a Moderate Buy with an average price target of $609.92, implying a 7.69% upside. The ETF's five holdings with the highest upside potential are Charter Communications, AppLovin, Micron Technology, Strategy, and Lululemon Athletica, while its five holdings with the greatest downside potential are Palantir Technologies, Advanced Micro Devices, Fastenal, Shopify, and Coca-Cola Europacific Partners. The QQQ ETF's Smart Score is seven, indicating it is likely to perform in line with the market.

The Invesco QQQ Trust ETF (QQQ) has seen a $676.6 million outflow, marking a 0.2% decrease week over week. This shift comes amidst significant movements in its underlying components, with T-Mobile US Inc (TMUS) rising by 6.5%, Cadence Design Systems Inc (CDNS) falling by 0.4%, and Fortinet Inc (FTNT) decreasing by 0.6%. The ETF's 52-week range spans from $402.39 to $566.06 [1].

Invesco Ltd. has proposed converting its QQQ ETF into an open-ended structure, which could potentially generate an additional $150 million in yearly revenue for the asset manager. According to Allison Dukes, the company's Chief Financial Officer, this transformation could enhance net revenue and adjusted operating income by about four basis points, or roughly $150 million [1]. The proposed change would allow Invesco to capture fee revenue generated by QQQ, currently uncollected by the firm.

The proposal has garnered support from investors and analysts. TD Cowen upgraded Invesco's stock following the proxy statement, while Evercore analyst Glenn Schorr noted that the move to collect fees on the Q’s should provide shareholders with optimism regarding revenue trends [1]. Invesco shares surged by nearly 2% on Wednesday, following a 5.2% jump on Tuesday, despite the company missing estimates for second-quarter inflows and earnings per share. The stock's significant rally was driven by the filing of the proxy statement on Thursday evening [1].

If approved, the conversion would lower QQQ’s expense ratio from 0.2% to 0.18%. A special meeting has been scheduled for October 24 to vote on the change, with a quorum of more than 50% of holders of outstanding voting shares required. This could present a substantial hurdle, according to Todd Sohn of Strategas Securities [1].

Meanwhile, T-Mobile US Inc (TMUS), a key component of the QQQ ETF, reported record Q2 performance and raised its targets for 2025. The company reported a 6% increase in revenue to $17.4 billion for the past quarter, leading to a 10% increase in net profit to $3.2 billion. TMUS added 830,000 mobile contracts, outperforming AT&T (401,000) and Verizon (-9,000) [2].

Deutsche Telekom shares, which posted the second-strongest rise on Frankfurt's DAX index on Thursday, are expected to rebound towards the broker's target price of €33, according to Oddo BHF analysts [2].

References:
[1] https://www.bloomberg.com/news/articles/2025-07-23/invesco-s-qqq-gambit-seen-unlocking-150-million-in-revenue
[2] https://www.marketscreener.com/news/deutsche-telekom-stock-benefiting-from-t-mobile-us-s-strong-results-ce7c5cd3d18ff422