Hello! This week’s ETF Wrap looks at equity strategies that are faring better than a Big Tech fund and the popular QQQ ETF so far in 2025 – and over the past month – amid worries about concentrated bets in megacap stocks.

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Exchange-traded funds that help investors minimize the heft of Big Tech stocks, or altogether avoid seven closely watched megacap companies, have outperformed in the past month.

Shares of the Roundhill Magnificent Seven ETF MAGS – which holds Nvidia Corp. (NVDA), Apple Inc. (AAPL) , Microsoft Corp. (MSFT), Amazon.com Inc. (AMZN), Google parent Alphabet Inc. (GOOGL), Facebook parent Meta Platforms Inc. (META) and Tesla Inc. (TSLA) – are down around 0.4% over the past month through Thursday. The loss compares with a gain of 3.7% over the same stretch for shares of the Defiance Large Cap ex-Mag 7 ETF XMAG, a fund that provides broad exposure to U.S. large-cap equities but excludes those seven Big Tech stocks, according to FactSet data.

Stocks related to technology and artificial intelligence have fallen into sharpened focus this week after President Donald Trump announced Stargate, a new joint venture that OpenAI says will invest $500 billion dollars in AI infrastructure in the U.S. over the next four years.

Big Tech stocks span across the information-technology, communication-services and consumer-discretionary sectors, with massive market values that can move broad benchmarks tracking the U.S. equities market. When these megacap stocks struggle, they risk dragging down indexes like the S&P 500 SPX and Nasdaq 100 NDX because of their outsized weightings in a small group of companies.

Recent developments in generative AI helped stoke a huge rally last year in Big Tech stocks, leaving some investors seeking strategies to help manage the risk of concentrated exposure. ETFs that equally weight companies in the tech-heavy Nasdaq 100, or exclude the 30 largest stocks in the index, paid off over the past month.

For example, the Direxion Nasdaq-100 Equal Weighted Index Shares QQQE, which gives each stock in the tech-oriented index the same weight, has climbed 3.7% over the past month through Thursday. That surpasses the 1.9% gain of the Invesco QQQ Trust Series I QQQ, a popular ETF that tracks the Nasdaq-100 index and has heavy Big Tech weights in its portfolio as a result.

Meanwhile, the iShares Nasdaq-100 ex Top 30 ETF QNXT, which tracks an index excluding the 30 largest stocks by market value in the Nasdaq 100, has climbed 4.6% in the past month through Thursday, according to FactSet data. The ETF is easily beating the Nasdaq 100 so far in 2025, with a 6.5% jump through Thursday.

The Nasdaq-100-tracking Invesco QQQ Trust Series I has lagged with a 4.2% gain year to date. The QQQ ETF is also trailing the 5.3% climb in 2025 through Thursday for Direxion’s ETF that equally weights stocks in the Nasdaq 100, according to FactSet data.

Doug Yones, chief executive officer of Direxion, told MarketWatch in a phone interview that beyond Direxion Nasdaq-100 Equal Weighted Index Shares, a majority of the firm’s ETFs are leveraged and inverse funds designed for traders making short-term bets in the stock market.

Activity in Direxion’s ETF lineup in the past week looked more “bullish” than “bearish,” he said.

Equal-weight Nasdaq 100

The Nasdaq-100 Equal Weighted Index has significant exposure to the tech sector – but less than the Nasdaq 100, according to data on Direxion’s website.

At the end of last year, the information-technology sector had a roughly 51% weighting in the Nasdaq 100, which was more than 10 percentage points higher than the exposure provided by the equal-weighted version of the index, according to data on Direxion’s website.

Apple had nearly 10% weight in the Nasdaq 100 at the end of 2024, while Nvidia, a semiconductor company that has become an AI darling on Wall Street, and Microsoft had the next biggest weights at more than 8% each, according to the data.

The iShares Semiconductor ETF SOXX and VanEck Semiconductor ETF SMH have surged so far this year, with the iShares ETF up 9.2% through Thursday and the VanEck fund soaring 10.2% over the same period, according to FactSet data.

AI chip maker Nvidia is by far the biggest holding in the VanEck Semiconductor ETF at more than 19% on Jan. 22, according to data on VanEck’s website. Nvidia had a much smaller weight in the iShares Semiconductor ETF, but still significant at almost 8% on the same date, data on BlackRock’s website shows.

Big Tech in AI ETFs

ETFs targeting stocks that stand to benefit from AI may also hold Big Tech companies.

For example, Nvidia was the top holding of the Global X Robotics & Artificial Intelligence ETF BOTZ on Jan 22 at more than 13%, while Tesla on that same date was the biggest holding of the Global X Artificial Intelligence & Technology ETF AIQ at more than 4%, data on Global X’s website shows.

Those are among the largest AI ETFs tracked by CFRA Research, according to Aniket Ullal, head of the firm’s ETF research.

The Global X Robotics & Artificial Intelligence ETF has rallied 8.1% so far this year, while the Global X Artificial Intelligence & Technology ETF has risen 5.6% over the same period – both beating the S&P 500 and Nasdaq 100 year to date, according to FactSet data.

The Global X Robotics & Artificial Intelligence ETF has a larger exposure to the industrials sector than the Global X Artificial Intelligence & Technology ETF, Ullal said in a phone interview.

“This year we’ve seen a sector rotation” in the U.S. stock market, with industrials beating technology so far in January, said Ullal. In 2024, the S&P 500’s tech sector trounced industrials.

Meanwhile, the much smaller VistaShares Artificial Intelligence Supercycle ETF AIS, launched in December to invest in AI stocks globally, has jumped 10.8% so far in 2025, according to FactSet data. Nvidia was among the fund’s top 10 holdings on Thursday, the sole stock in that list falling in the Big Tech category of megacap companies in the U.S. The ETF’s top position was in South Korean semiconductor company SK Hynix Inc. (KR:000660), which supplies products to Nvidia.

The U.S. stock market closed higher Thursday, bringing the year-to-date gain of the SPDR S&P 500 ETF Trust SPY to 4%. The S&P 500 climbed 0.5% on Thursday to a record high, lifted by a broad rally that saw all its sectors rise while Big Tech stocks posted mixed results.

As usual, here’s your look at the top- and bottom-performing ETFs over the past week through Wednesday, according to FactSet data.