Investors Bet $1.5 Billion on Big Tech Stock Rebound

With Nasdaq 100 index futures rallying again on Tuesday, that is proving to be true for investors who collectively invested in the ProShares UltraPro QQQ ETF (ticker TQQQ) on Friday.

The fund, which uses options to deliver three times the performance of benchmarks, was one of the market leaders in early Tuesday trading after catering last week to concerns about the Federal Reserve’s bullish leanings and the Omicron version.

Flow data, which comes with a one-day lag due to the way the fund was settled, showed investors added an unprecedented $1.47 billion at the end of last week. More than $13 billion in TQQQ shares changed hands in the session as it fell 5%.

Higher interest rates make so-called growth stocks less attractive because most of their value is tied to potential future earnings, which are less attractive if yields are higher or higher. Nonetheless, betting against the tech giants has rarely paid off. Apple Inc. and Microsoft Corp. The likes of U.S. still dominate their industries, while investors often rush to the safety of mega-caps in times of economic doubt.

As a leveraged fund, TQQQ is intended for short-term trading. Yet such is the strength of Big Tech, an investor who has stayed put over the past five years would have seen an ETF return of around 1,400%.

The Nasdaq 100’s gains on Monday lagged behind other major U.S. equity gauges, but the TQQQ fund jumped 2.3% on the back of its leverage. Tech index futures were up 1.8% at 7:39 p.m. in New York on Tuesday, with the ETF up 5.4% in premarket trading.