ProShares UltraPro QQQ (TQQQ), a leveraged ETF that aims to deliver three times the daily performance of the Nasdaq-100 Index, surged 5.83% in intraday trading on Thursday. This significant rise comes amid optimistic projections for the US economy and the tech sector, particularly driven by investments in artificial intelligence (AI).
Recent analysis suggests that the U.S. economy's potential growth could approach 4% by 2030, significantly higher than previous estimates. This optimistic outlook is largely attributed to America's leadership in 10 out of 12 industries that are expected to shape the future, with a particular emphasis on AI-related investments. The launch of ChatGPT in late 2022 has sparked an AI-driven capital expenditure boom, with many tech firms doubling down on their AI investments despite economic uncertainties.
As TQQQ provides leveraged exposure to the tech-heavy Nasdaq-100, it's particularly sensitive to positive sentiment in the technology sector. The fund's dramatic rise today reflects investors' growing confidence in the long-term prospects of US tech companies and their potential to drive economic growth through AI and other innovative technologies. However, investors should note that while leveraged ETFs like TQQQ can provide amplified returns on positive days, they can also lead to magnified losses when the market moves against them.