Wall Street Questioned the AI Boom, Earnings Are Delivering: Here Are the ETFs You Should Watch Closely
Artificial intelligence is translating into record earnings surprises, with companies exposed to the AI ecosystem outperforming the broader market by a wide margin as second-quarter results roll in.
AI-Exposed Companies Delivering Historic Earnings Beats
The S&P 500 companies have beaten Wall Street earnings estimates by an average of 27% so far this quarter, putting the index on track for its strongest earnings surprise season in years, according to data shared by The Kobeissi Letter.
The Nasdaq 100 companies are exceeding expectations by an average of 55%, while companies in Bloomberg’s AI Value Chain Index are beating estimates by roughly 71%.
Big Tech is Backing Up the AI Narrative
Microsoft Corp. (NASDAQ:MSFT) posted accelerating Azure growth and said demand continues to outpace available AI capacity, while Amazon.com, Inc. (NASDAQ:AMZN) raised its 2026 capital spending target to $220 billion after AWS delivered its fastest growth in 18 quarters.
Both companies reaffirmed plans to continue investing heavily in AI infrastructure despite rising capital expenditures, as demand remains strong enough to support the industry’s record spending cycle.
Advanced Micro Devices Inc. (NASDAQ:AMD), Palantir Technologies Inc. (NASDAQ:PLTR) report earnings this week, while Space Exploration Technologies Corp. (NASDAQ:SPCX) will post its first earnings since its historic June IPO on Tuesday.
AI ETFs Offer Broad Exposure
The Invesco QQQ Trust, Series 1 (NASDAQ:QQQ) , which tracks Microsoft, Apple Inc. (NASDAQ:AAPL), Google parent Alphabet Inc. (NASDAQ:GOOG) (NASDAQ:GOOGL), and Amazon, has $455.80 billion in assets under management and charges an average expense ratio of 0.18%. The fund has returned 12.21% year-to-date and 21.96% over the past year.
iShares PHLX SOX Semiconductor Sector Index Fund Holdings (NASDAQ:SOXX) holds chipmakers Nvidia Corp. (NASDAQ:NVDA), Qualcomm Inc. (NASDAQ:QCOM) and Lam Research Corporation (NASDAQ:LRCX). The fund has $42.64 billion in assets and an expense ratio of 0.34%. The fund has gained 60.95% so far this year and 110.02% over the past year.
The iShares U.S. Technology ETF (NYSE:IYW) holds the top tech companies, with $23.28 billion in assets and charges an expense ratio of 0.38%. It has gained 19.09% year-to-date and 31.38% over the past year.
Fidelity MSCI Information Technology Index ETF Holdings (NYSE:FTEC) has $20.96 billion in assets and charges an expense ratio of 0.08%. It has risen 19.79% year-to-date and 31.68% over the past year.
Price Action: QQQ closed 0.65% higher on Friday at $687.99 and lost 0.51% in extended trading.
Benzinga edge rankings indicate QQQ has a Momentum score in the 64th percentile and a negative price trend in the short term. In the medium and long term, the fund has a positive price trend.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
Photo: PeachShutterStock / Shutterstock