Growth stocks have taken a hit in the market so far this year as investors have entered risk-off mode, thanks to the economic uncertainty caused by the ongoing tariff-fueled trade war. However, the good part is that the stock market sell-off has brought the valuations of some fast-growing companies down to attractive levels.

C3.ai (AI 2.45%), for instance, has witnessed a substantial pullback of 44% in its stock price this year and is now trading at just under $20. The enterprise artificial intelligence (AI) software provider trades at a substantial discount when compared to where it was at the end of 2024. At the same time, C3.ai has been growing at a nice clip, adding new customers and landing bigger deals with existing ones.

The company is in a solid position to make the most of the enterprise AI software market in the long run. This is why someone looking to put $20 into a growth stock right now should definitely consider taking a closer look at C3.ai.

Below, I’ll show you why a $20 investment in C3.ai could turn out to be a smart long-term move.

C3.ai’s accelerating growth is here to stay

The demand for enterprise AI software is picking up, which explains why C3.ai’s growth rate has been improving, as well. In the third quarter of fiscal 2025 (which ended on Jan. 31), the company reported a 26% year-over-year jump in revenue to $99 million. That was higher than the 18% revenue growth it reported in the prior-year period.

C3.ai’s enterprise AI applications serve multiple verticals, such as customer relationship management (CRM), financial services, defense and intelligence, and supply-chain management, among others. It also offers an agentic AI platform in which customers can build, deploy, and operate AI agents. These offerings are now being used by multiple businesses and government organizations.

In its February earnings release, C3.ai management pointed out that its AI software tools are being deployed by the likes of Sanofi, ExxonMobil, Nucor, the U.S. Department of Defense, the U.S. Air Force, and multiple state government agencies. Importantly, C3.ai’s customer list is likely to get longer as the company has been signing more agreements and conducting pilot projects with potential clients.

C3.ai closed 66 agreements in fiscal Q3, an increase of 72% from the year-ago period. These included 50 pilot projects with customers of various sizes. An important thing to note is that C3.ai has adopted a smart strategy of partnering with major cloud service providers, such as Amazon, Microsoft, and Alphabet‘s (NASDAQ: GOOG) (NASDAQ: GOOGL) Google, to offer its AI software tools on their platforms.

C3.ai has been focused on strengthening its partnerships with these cloud giants, and that move is reaping rich rewards for the company. For example, C3.ai is now offering its entire suite of enterprise AI application software on Microsoft’s commercial cloud platform after the two companies bolstered their partnership last year.

The expanded agreement led to a 460% increase in the agreements closed by C3.ai on Microsoft’s cloud platform. Even better, C3.ai is offering its AI solutions through Microsoft’s global sales infrastructure, and this move has allowed it to enhance its qualified sales pipeline by a whopping 244% from the year-ago period.

C3.ai believes that it can jointly pursue 621 new customer accounts with Microsoft, which could help the company grab a bigger share of the generative AI software market in the future. As a result, there’s a good chance that the company’s growth could turn out to be better than Wall Street is expecting.

AI revenue estimates for current fiscal year data by YCharts.

The chart above tells us that C3.ai’s revenue could grow 20% in fiscal 2026 and 18% in fiscal 2027. That’s lower than the 25% growth that the company is expected to deliver in the current fiscal year. However, the expanding sales pipeline, the lucrative addressable opportunity in AI software, and a smart go-to-market strategy of offering its tools through popular cloud service providers could help it exceed consensus expectations in the future.

A solid balance sheet and valuation make the stock worth buying

C3.ai is now trading at just 6.7 times sales, which is significantly lower than its price-to-sales ratio of 11.2 at the end of 2024. The stock’s sales multiple is almost in line with the U.S. technology sector’s price-to-sales ratio, which makes it worth buying considering the potential growth on offer.

Additionally, C3.ai has a solid balance sheet with just $4.5 million in debt and $724 million in cash. This puts the company in a nice position to aggressively invest in product development and sales and marketing to make the most of the end-market opportunity on offer. Moreover, C3.ai’s cash position should give it the ability to make acquisitions to strengthen its presence in the AI software market.

All this makes C3.ai an attractive AI stock to buy with $20 right now, especially considering that its one-year price target of $29 points toward potential gains of over 50% from current levels, a target it may be able to achieve as the discussion above indicates.

Many growth stocks have struggled so far this year. Rivian (RIVN -3.66%) is no exception. Shares are down roughly 16% year to date, although the stock’s volatility has shifted this figure around quite a bit.

The strange thing is that shares are dropping in value right as the company gears up for its biggest growth spurt in years. Could this be the smartest investment you make in 2025?

Watch out for this growth inflection point

As an electric car stock, Rivian struggled in 2024 as the industry dealt with lower-than-expected sales growth. To be clear, electric vehicle (EV) sales still rose last year, but growth rates fell below most analysts’ forecasts.

Without a well-known brand name like Tesla, or the near-term expectation for new model introductions like Lucid Group, Rivian has struggled for relevancy. But that struggle could be over within 12 months, creating the potential for big upside to the current stock price.

One of the biggest growth hurdles that EV makers face is making affordable, mass market vehicles a reality. Producing cheap cars typically requires scale, but the relatively small size of new automakers like Rivian and Lucid makes that difficult. Tesla addressed this challenge by first introducing a luxury vehicle with lower volumes and higher price points to establish the EV maker as a brand. Only after it achieved this initial scale did the company move into higher-volume, lower-price-point models.

Automakers like Rivian and Lucid have attempted to follow this proven plan for growth. Lucid just introduced its second luxury model earlier this year. But by many metrics, Rivian is a year or two ahead because it already has two luxury models on the market. Starting in early 2026, it also plans to begin shipping the first of three new mass market vehicles, all of which are expected to have a price point of under $50,000. That price point should unlock tens of millions of new buyers for Rivian’s vehicles.

When you look at analyst expectations for growth this year, Rivian comes in dead last versus the competition, with just 8.3% revenue growth anticipated for 2025. Understandably, Rivian shares are priced the cheapest on a price-to-sales (P/S) basis, trading at just 2.3 times sales. But if you look ahead to 2026, this equation could flip. Mass market vehicles were the key to renewed growth for Tesla. So if you’re willing to look beyond Wall Street’s typical 12-month time horizon, you could foreseeably snap up Rivian shares at a discount before the next leg of growth arrives.

Should you perhaps wait a bit more before jumping in? The answer might surprise you.

RIVN P/S Ratio data by YCharts.

Should you buy Rivian stock today or in 2026?

It’s reasonable to ask the question: If Rivian’s growth won’t return until 2026, should you wait until then to buy shares instead of waiting patiently for a year?

It’s hard to buy growth stocks at a discount. That’s because once sales growth returns, the market typically rerates shares to a higher valuation. To make the biggest profit, investors must buy shares before the rest of the market catches on. This typically requires buying well in advance of growth inflection points, waiting patiently for growth to return.

Will Rivian’s growth spike in 2026? Nothing is for certain. But if Tesla’s growth history is any indication, the release of mass market vehicles is a great recipe for doubling or even triple sales. At just 2.3 times sales, Rivian’s stock is priced too cheaply should these growth rates arrive in 2026, or even 2027. This story will take time, but Rivian shares can certainly be considered a “smart” investment for patient growth investors looking to get an edge on the market.

Dividend stocks are a blessing to investors because they provide income and don’t rely on stock price appreciation to reward shareholders. You can’t go wrong with dividend payouts at any time, but they’re especially helpful when there’s a lot of uncertainty in the stock market. Or, more uncertainty than usual, at least.

That’s been the story with the stock market so far in 2025 for U.S. stocks. Both the S&P 500 and Nasdaq Composite are down year to date (YTD), spending time in correction territory and the Dow Jones Industrial Average is barely in the green, up less than 1% as of March 25.

If you want investment income without worrying too much about stock price movements, the following two dividend stocks are worth adding to your stock portfolio.

1. AT&T

After struggling for the better part of five years, AT&T‘s (T) stock has rallied over the past 12 months, up over 60%. I figured a turnaround for AT&T’s stock wasn’t far-fetched, but even I must admit that the past year surprised me a bit.

In early 2022, AT&T slashed its dividend by almost half, going from $0.52 quarterly to $0.2775. This move was made so it could have extra cash to pay down its debt and make needed investments as it shifted its focus back to its core telecom business.

During the period after the dividend slash, there were concerns that AT&T would do away with the dividend, but that no longer seems like a realistic (or smart) move.

AT&T’s free cash flow has reached a level ($17.6 billion in 2024) where it supports its dividend and debt obligations, with enough left over for the investments needed in its broadband and fiber businesses. 

AT&T’s current dividend yield isn’t as attractive at its 8% average over the past five years, but the 4% yield is still around three times the S&P 500 average.

T Dividend Yield data by YCharts

AT&T’s growth will depend a lot on expanding its fiber business. Luckily, that’s been a positive area for AT&T. In the fourth quarter, fiber revenue grew 18% year over year, and in 2024, it added 1 million customers, marking the seventh consecutive year it has added at least 1 million.

Telecom is an industry that’s not going anywhere, and AT&T will be one of its top players for the foreseeable future. It’s a good buy-and-hold dividend stock for those not expecting its recent stock price growth to be the norm.

2. Coca-Cola

Coca-Cola‘s (KO -0.54%) products and brands are known and loved worldwide, distributed in over 200 countries and with Coca-Cola soda ranking as an iconic product.

Coca-Cola has products that people buy regardless of economic conditions. That doesn’t make the company recession-proof, but it sure makes it more recession-resistant than most companies. That’s how it has managed to become a blue chip dividend stock.

Coca-Cola’s quarterly dividend is $0.51, with an average yield of around 2.9% over the past year. However, the more impressive part is that the company is a Dividend King, having increased its dividend for 63 consecutive years. In just the past 10 years, its dividend has increased by 55%.

KO Dividend data by YCharts

At its size, Coca-Cola isn’t a company that will have double-digit revenue growth year in and year out, but the appeal is its reliability and the fact that investors will likely never have to doubt its dividend (short of a drastic and unforeseen event happening).

Part of Coca-Cola’s reliability rests on the fact that it hasn’t gotten comfortable with the success of some of its flagship products like Coca-Cola Classic, Diet Coke, and Sprite. It has expanded into water, coffee, tea, juices, plant-based drinks, and even alcohol.

It’s a smart buy for investors who want reliability, consistency, and a stock that prioritizes rewarding its shareholders.

With the Nasdaq Composite (^IXIC -4.00%) moving into correction territory (down at least 10% from an all-time high), several of its constituent stocks are suddenly a lot more attractively priced than they were to start the year. While investors never like to see markets pull back into correction territory, it does present a great buying opportunity for some great companies caught up in the sell-off.

Let’s look at two quality stocks you can buy on this market dip and hold forever.

1. Alphabet

With the market pullback, Alphabet (GOOGL -4.49%) (GOOG -4.41%) finds its shares down about 20% (as of this writing) from its all-time highs set in early February. The dip in price brings its stock down to a very attractive valuation of a forward price-to-earnings ratio (P/E) of 18.5. That’s not expensive for a company with the set of businesses that Alphabet owns.

While best known for its search business Google, Alphabet is actually a whole lot more. It is the world’s leading digital advertising company, where it connects advertisers with consumers through both its own properties as well as third-party sites. Google is the largest digital advertising platform in the world, while its YouTube platform is the world’s fourth-largest. In between are Meta Platforms‘ social media apps, such as Facebook and Instagram, and Amazon, which serves up sponsored ads for third-party products sold on its site.

Alphabet is betting heavily on artificial intelligence (AI), which it is using to improve its search results and to create AI Overviews to quickly give users answers to their questions. Historically, the company has only served ads on about 20% of its search queries, so its AI Overviews are a strong potential source of growth as eventually, it should be able to monetize them through new ad formats. The company has a huge network of advertisers and search history, so all the ingredients are there to profit from AI Overviews.

At the same time, the company’s newest Gemini 2.0 model is improving and catching up to the competition. It has its own Gemini app, while Gemini is also being incorporated throughout Alphabet’s businesses. This is helping the company become a leader in multimodal search (such as visual search), while its Veo 2 text-to-image video generator has risen above the competition.

Alphabet also owns the third-largest cloud computing business with Google Cloud, which is helping customers build out their own AI models and applications. The unit grew revenue by 30% last quarter and segment income by 142%. The unit has seen a profitability inflection point now that it has reached sufficient scale. The company has also developed its own custom AI chip with the help of Broadcom, which it says is leading to faster inference times and lower costs. This should help the business continue to see margin improvements.

Alphabet is also a leader in two emerging technologies: quantum computing and autonomous driving. Its Willow chip recently made a big breakthrough in solving an issue that has hampered quantum computing, while its Waymo unit is the only company offering paid robotaxi rides in the U.S.

Take this all together, and Alphabet is a great buy at current levels.

Image source: Getty Images.

2. Microsoft

Like Alphabet, while Microsoft (MSFT -3.34%) is known for its software Office 365 productivity tools, such as Word, Excel, and PowerPoint, it is also a whole lot more. It owns the second-largest cloud computing business in the world and the Windows PC operating system. In addition, it operates the professional development website LinkedIn, software development platform GitHub, AI voice platform Nuance, and the Xbox video gaming platform as well as video game studios such as Activision Blizzard, among other businesses.

Microsoft has proven to be adaptable over the years, driving growth by transitioning from a traditional software licensing model to offering its productivity software programs through its Office 365 subscription model. More recently, the company has been one of the early leaders in AI through a large investment and partnership in OpenAI.

The biggest beneficiary of its embrace of AI has been its cloud computing unit, Azure, which grew its revenue by 31% last quarter. Similar to Google Cloud, customers are flocking to Azure to help them build out their own AI models and applications. Last quarter, Azure AI revenue soared 157% year over year. Meanwhile, it said this is leading to robust adoption of its SQL Hyperscale and Cosmos DB solutions.

Microsoft’s biggest AI opportunity, however, may lie in its Microsoft 365 AI copilots, which are AI assistants that help users save time and more easily complete tasks. Copilots can do such things as prioritize Outlook email messages, summarize a Word document, or help draft a PowerPoint presentation through natural language. They have also started to be able to help with more complex tasks, such as being able to use the Python programming language in Excel using only natural language prompts.

At the cost of $30 per enterprise user per month, on top of the Microsoft 365 subscription, this is a big potential growth opportunity for Microsoft. If these Copilots can prove to save time and money, they will eventually see high levels of adoption.

Following the market’s pullback, the stock trades at a forward P/E of 25 times based on analyst estimates for fiscal year 2026 (ending in June 2026). That’s a reasonable valuation for a leading tech company that has a large recurring nature business and a history of adaptability. As such, this is a great time to look to establish a position in the stock.

With the three major indexes slipping over the past few weeks, now may not seem like the best time to invest in stocks. It’s always more tempting to buy when we see a particular stock or asset rising, as we can easily imagine our returns if the momentum keeps going. The idea is to hop on the bandwagon and immediately see your investment take off.

But as strange as this may sound initially, to truly score an investing win, one of the best things to do is consider buying during these periods of uncertainty. Why? Because quality stocks and other assets may be trading at bargain prices, meaning you can snap them up for a song and go on to benefit once they recover and advance over the long term.

It’s important to remember that, generally, elements troubling the market — from a government policy decision to rising inflation or a recession — won’t last forever. Today, investors are concerned about President Donald Trump’s tariffs on imports from China, Canada, and Mexico and the impact that will have on the economy and corporate earnings.

This may, indeed, represent a headwind, but quality companies will be able to manage these times and come out ahead. Considering this, is the SPDR S&P 500 ETF Trust (SPY 0.56%) — a bet on the S&P 500 — the smartest investment you can make today? Let’s find out.

Image source: Getty Images.

What’s an ETF?

First, let’s talk a little bit about this sort of investment. It’s an exchange-traded fund (ETF), an instrument that includes many different stocks based on a particular theme, such as retail or biotech, or according to the player’s presence in a particular index, the latter being the case with the fund we’re talking about today.

Like stocks, ETFs trade daily on the market. So, if you’re familiar with buying stocks, you can go about purchasing an ETF in exactly the same way. The one thing to be aware of is that ETFs do come with a management fee, expressed as an expense ratio. To preserve your winnings over time, go for an ETF with an expense ratio of less than 1%. With a ratio of 0.09%, the SPDR S&P 500 ETF largely fits the bill.

Now, we’ll consider this ETF specifically and whether it’s a smart buy for you. The SPDR S&P 500 ETF tracks the S&P 500’s performance, so it truly is a bet on the overall stock market. It’s important to remember that this index includes the top companies driving today’s economy and makes adjustments regularly to ensure this is always the case. So, by investing here, you’ll always be exposed to the leaders of the moment.

The S&P 500’s recent performance

Of course, during market downturns, you’ll likely see this ETF fall — as is the case today. Moving in lockstep with the S&P 500, it’s slid more than 6% over the past two and a half weeks. During times like these, certain individual stocks in your portfolio may be more likely to outperform. For example, as the overall market declined, stocks, including beverage giant Coca-Cola and pharma powerhouse AbbVie, advanced over the past month. This is why it’s a great idea to diversify across companies and industries — and across stocks and ETFs.

SPY data by YCharts.

But if you can make only one investment right now, the smartest move may be to pick up a few shares of the SPDR S&P 500 ETF, and here’s why. The price, considering recent declines, has come down. But more importantly, this purchase offers you exposure to an index that has demonstrated resilience 100% of the time throughout its history.

After every period of decline, the index has gone on to recover and soar over time. In fact, the S&P 500 has delivered an annualized average return of more than 10% since its launch as a 500-company index in the late 1950s.

It’s impossible to time the market and pick up a stock or an ETF at its very lowest point, but here’s some good news: The S&P 500’s track record offers us reason to be optimistic about returns over time if we invest in it at any point. And that’s why the SPDR S&P 500 ETF Trust makes a fantastic buy right now — even if the S&P 500 falls further in the short term.

The AI landscape is undergoing transformational change at the current time. The latest innovation that has come into existence in the AI realm is Grok 3 AI. Wait, there is more to it! It was introduced by none other than Elon Musk. In fact, Musk’s AI company – xAI has recently introduced Grok 3 artificial intelligence. It is the reason why the words Grok 3 Elon Musk are trending right now.

The Grok 3 release has gained global attention and there is a reason for it. In November 2003, Grok 1 was released, but it was nowhere close to the level of Claude 3.5 Sonnet or GPT-4o. Just a few months later, Grok 2 was released with some improvements, but it was still far behind the top models. However, Grok 3 AI comes with model improvement and an increase in training computing. The team claims that it is 10-15x more powerful than Grok 2.. Let’s dive deeper into the topic to broaden our knowledge of Grok 3.

Grok 3 Uncovered: Breaking New AI Boundaries

Grok 3 is the latest AI chatbot that Musk’s xAI has unveiled. According to Musk, it is definitely the smartest AI to exist on earth. During the launch event, several of the features of the innovative tool were shown, including text-to-video conversion, advanced reasoning capability, and the mechanism relating to self-correction. Although it may be quite early to explore the capabilities of Grok AI at a comprehensive level, it has shown immense promise.

One unique feature that helps Grok 3 AI to stand out from its predecessor is related to the use of computational resources. The team behind the development of Grok 3 has used ten times the computational resources that were utilized in the previous model. On the basis of the tests that have been undertaken, Grok 3’s performance is much better than that of other AI tools that exist today. In order to address the question ‘What is Grok 3?’ holistically, you need to look at its core capabilities.

Core features of Grok 3

Grok 3 comes with a number of unique features and attributes that make it stand out from the crowd. By understanding its chief features, you can get a better idea of the capabilities of the novel invention. Some of the main features that contribute to the uniqueness of Grok 3 include:

DeepSearch is definitely a distinguishing attribute of Grok 3 that you need to familiarize yourself with. It is basically an Artificial Intelligence-powered smart search engine. That’s not all! It has been specifically designed to improve the level of transparency and interaction. It is undoubtedly a standout attribute since it gives a glimpse into the thought process of Grok 3 AI. Moreover, it also simplifies queries into smaller parts and offers rich contextual insights. 

Many people have already started wondering about the availability of Grok 3 artificial intelligence. The novel tool is already available to Premium+ subscribers on X. Furthermore, the company plans to introduce a new subscription plan called ‘SuperGrok.’ Although it has not been launched till now, it will come into existence soon for the users of Grok 3.

Another distinguishing feature of Grok 3 artificial intelligence revolves around its reasoning capability. That’s right. The novel AI solution has been designed as a reasoning tool. It has not been designed like the traditional AI tools. Such a designing approach could mean that Grok 3 AI has stounding reasoning competencies and abilities. The team has consciously adopted such an approach so that Grok 3 AI can be more adaptable and intelligent than other AI tools. 

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Key things to know about Grok 3 AI

One may certainly expect Grok 3 artificial intelligence to be the next big thing that is about to enter the AI realm. In order to get familiar with Grok 3, you need to understand several things. Firstly, Musk, during the launch event, focused on the unique dimensions of the AI tool, including empathy and deep understanding. It implies that Grok 3 AI is most likely to combine these elements, thereby creating better value for users.  

Although Grok 3 AI is very new at the moment, its polished version may emerge within a week. Moreover, users can expect to see improvements in the novel AI tool every single day. A specific feature that the team has been working on revolves around voice interaction attributes.  It has the potential to revolutionize how users interact with AI technology.  

The team that has developed Grok 3 artificial intelligence has strengthened the capabilities of the tool by adopting a comprehensive approach. It has obviously made modifications to the training process in order to make it better and more effective. Additionally, the team has focused on other areas, including the implementation of synthetic databases, reinforcement learning, and self-correction capabilities. These key elements may play a catalytic role to enhance the overall performance of Grok 3 AI.  

Superior capability of Grok 3

During the live demonstration of Grok 3, there was an amazing revelation regarding the capability of Grok 3. Musk and the development team demonstrated the new AI solution’s capability. The comparison of Grok 3 with other popular AI models such as ChatGPT 4, DeepSeek, and Claude 3.5 Sonnet shows that Grok 3 is better than them. The performance of Grok 3 has been superior, especially in areas including mathematics, coding, and scientific reasoning. 

According to Elon Musk, Grok 3 AI has the capability to save hundreds of hours that one may spend on performing coding tasks. It is definitely amazing news for all the coders, engineers, and programmers all across the globe. The robust capabilities of Grok 3 artificial intelligence will play an instrumental role to heighten its relevance as well as applicability in the real world. 

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Need for frequent updates

In case users wish to derive optimum value from Grok 3 AI they need to update their Grok app. It will enable them to enjoy the most advanced features of the new AI tool. Furthermore, the SuperGrok premium subscription plan will serve as the ultimate pathway that will allow users to gain access to the latest AI developments. 

Since Grok 3 AI will be receiving updates very frequently, users need to check for updates frequently. Even in a matter of 24 hours, new capabilities, features, and improvements may arise that users can enjoy while using Grok 3 artificial intelligence.

Challenges and achievements by the development team of Grok 3

Many people today already believe Grok 3 to be an extremely promising AI tool. However, in order to develop the tool, the development team faced a broad range of challenges as well as obstacles. 

The team had to create their very own data center right from scratch while working on Grok 3 AI. Moreover, the complexity of the situation became intense since they had to do it in a matter of only four months. It was definitely not an easy feat to achieve. 

The team at xAI was able to get 100,000 GPUs up and running within just 22 days. That’s not all. It was also able to successfully double the capability in a span of 92 days. It is definitely a remarkable milestone for the entire team. Thus, the developers and all members at xAI have worked extremely hard to create Grok 3 artificial intelligence and integrate unique features into it.

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Bright future of Grok 3 AI

On the basis of the capabilities, features, and functionalities of Grok 3 AI, the future of AI seems to be extremely bright and prosperous. Its capabilities may lead to a surge in demand and use in the practical setting. 

Users may prefer the specific AI model over other models owing to its robust reasoning capabilities, high level of accuracy, and top-notch performance. As per the revelations by Elon Musk and his team at xAI, Grok 3 artificial intelligence could transform the existing AI arena and show human beings something new. However, one has to wait and watch to see the future trajectory of Grok 3 AI.

Final words

Grok 3 is the ultimate AI solution that Elon Musk’s xAI has launched. The new AI tool is full of promise and potential. It has been positioned as the smartest AI that has ever come into existence. 

Many believe that Grok 3 artificial intelligence could be the ultimate game changer in the prevailing AI realm. Users can explore the features and functionalities of the new novel AI to get a glimpse into its actual capabilities. Moreover, by regularly updating the application, users can derive maximum benefits from Grok 3 AI and enjoy its latest improvements. 

The Nasdaq Composite is one of the U.S. stock market’s three major indexes, tracking almost every stock on the Nasdaq stock exchange.

The Nasdaq-100 is a subset of the Nasdaq Composite that tracks the largest 100 nonfinancial companies on the Nasdaq stock exchange, and investing in it is one of the more popular ways to invest in the Nasdaq. It’s much more concentrated than the Nasdaq Composite, but that has worked out in its favor.

If you have $2,000 available to invest (meaning an emergency fund saved and high-interest debt paid down), the Invesco QQQ Trust (QQQ 0.42%) is a great ETF to consider if you want to invest in the Nasdaq.

Image source: Getty Images.

Big tech is leading the way for the ETF

Although this ETF contains 101 stocks, the top 10 holdings do a lot of the heavy lifting, making up almost 50% of the fund’s value. Below are its top holdings and how much of the ETF they make up:

Source: Invesco. Percentages as of Feb. 11.

Having 10 stocks account for over half of an ETF’s holdings doesn’t quite scream diversification, but it’s true for many market-cap-weighted ETFs because of skyrocketing big tech valuations.

The bad news is that the performance of these companies will heavily influence the ETF’s success (or lack thereof). The good news is that these companies have been some of the top-performing stocks over the past decade. In this case, the worst-performing stock of the bunch at that time is Alphabet’s class C stock, and it’s up over 570%. Not too shabby.

Big tech has been off to a shaky start in 2025, but that shouldn’t be an indictment of its long-term growth potential. Many valuations have admittedly been inflated because of hype fueled by artificial intelligence (AI), but a handful of industries are still on the early side of what they could (and should) become.

With cloud computing, cybersecurity, AI-driven productivity, and semiconductors, the runway for these top holdings is far from over. The key is to stay focused on the long term and become reactive to short-term happenings in the market.

This ETF has a history of outperforming the S&P 500

The S&P 500 — which tracks the 500 largest U.S. companies on the market — is the most important index on the U.S. stock market, and it’s honestly not even close.

Most stocks and ETFs compare their performance against the S&P 500’s to determine whether they are overperforming or underperforming. In this ETF’s case, it’s the former.

QQQ Total Return Level data by YCharts.

How could a $2,000 play out for investors?

To give you an idea of how lucrative the ETF can be, let’s see how a $2,000 investment 20 years ago would fare today.

QQQ data by YCharts.

Now, past results don’t guarantee future performance, and there’s no way to know how the ETF will perform, but you can see how resilient the ETF can be in the long run — which is what you should be focusing on.

Even if we assume the ETF grows a more modest 10% annually, a $2,000 investment today could be worth close to $5,100 in 10 years and close to $13,000 in 20 years (accounting for the ETF’s 0.20% expense ratio).

If you have reservations about investing the full $2,000 at once, you can take the dollar-cost-averaging approach and break down your investments into smaller installments. You could make two $1,000 investments, four $500 investments, five $400 investments, or whatever you are most comfortable with.

Using dollar-cost averaging could help shield you against sudden drops in the market and reduce the impact of volatility.