Top 5 QQQ Stocks By Index Weight

1. Apple Inc. (NASDAQ:AAPL)

Index Weight as of 10/12: 13.51%

Apple Inc. (NASDAQ:AAPL) is a leading computing company that produces iPhones, iPads, and computers. The company also sells software services. With an index weight of 13.51% as of 10/12 and a market cap of almost $2.4 trillion as of 10/13, Apple Inc. (NASDAQ:AAPL) ranks #1 on our list of Top 25 QQQ Stocks By Index Weight.

Despite the market weakness in many tech shares, Apple Inc. (NASDAQ:AAPL) has fallen less than the NASDAQ index with the stock down 19.5% year to date.

Distillate Capital said the following about Apple Inc. (NASDAQ:AAPL) in its Q2 2022 investor letter,

Apple was largest new purchase in the quarter, at a 2% weight. Apple underperformed the overall market last quarter,and given very minimal debt, this price weakness translated into a commensurate fall in its enterprise value. For stocks with higher debt levels, it takes a disproportionately bigger market cap drop to achieve the same valuation improvementand this is a key reason we avoid highly leveraged names where significant price weakness can be experienced during a revaluation process. Alongside this decline in EV for Apple, its estimated free cash flows have risen steadily throughout the year. This contrast between a falling enterprise value and rising free cash flow, which is highlighted in Figure 12, made the stock sufficiently better valued such that it entered the portfolio. While Apple’s valuation is now attractive enough to warrant inclusion in the portfolio, it still ranks in the bottom quartile of the portfolio’s holdings and so the stock’s initiating weight is capped at a 2%. This contrasts significantly with Apple’s near-7% position in the S&P 500 benchmark,and reflects both our preference to avoid too much concentration risk as well our goal of ensuring that the overall portfolio valuation is as attractive as possible while balancing characteristics of stability and low indebtedness.

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