Goldman Sachs tech ETF outperforms S&P 500

What happened: Vanguard's Information Technology Index Fund (VGT) and Invesco QQQ Trust ETF (QQQ) have significantly outperformed the S&P 500 in 2026, with VGT up 22% compared to 8% for the S&P 500. Over the past decade, QQQ has averaged over 20% annualized returns, driven by tech stocks. Goldman Sachs' Future Tech ETF (GTEK) has surged 52% YTD, outperforming the S&P 500 by a 4.6-to-1 margin. Meanwhile, the First Trust NASDAQ Technology Dividend ETF (TDIV) has surged 103% over the past year, turning $10,000 into roughly $20,300.

Market impact: Tech-focused ETFs are benefiting from secular growth megatrends such as AI and cloud computing, driving their outperformance. The "Magnificent Seven" tech stocks (AAPL, MSFT, AMZN, GOOGL, FB, NVDA, TSLA) account for over a third of QQQ's holdings, but GTEK's strategy of avoiding these stocks and holding AI picks-and-shovels names has also proven successful. The strong performance of tech ETFs indicates a rotation towards growth stocks, with investors favoring companies positioned to benefit from long-term trends.

What to watch next: Investors should closely monitor the Q2 earnings reports from the Magnificent Seven, scheduled between late July and early August, for guidance on the sustainability of tech sector growth. Additionally, keep an eye on the performance of GTEK's AI picks-and-shovels strategy, as strong results could signal a broader rotation towards these names. Lastly, watch for any changes in hyperscaler capex guidance, as this can impact tech supply chain stocks and ETFs.