Microsoft, Nvidia, Meta Platforms, and Tesla Helped Propel This Vanguard ETF Over 13% Higher in 9 Days. Here's Why It's Still a Buy Now.

Market Overview - The S&P 500 experienced its first nine-day winning streak since 2004, closing higher from April 21 to May 2, driven by strong earnings from tech companies and positive trade talks [1] - Exchange-traded funds (ETFs) with significant exposure to growth stocks, such as the Vanguard Growth ETF, surged, with VUG rising 13.7% during this period [2] Vanguard Growth ETF - The Vanguard Growth ETF focuses on growth stocks, holding 166 stocks compared to 505 in the Vanguard S&P 500 ETF, allowing for a concentrated investment strategy [4] - The ETF has a high concentration in the "Magnificent Seven" mega-cap growth stocks, which include Apple, Microsoft, Nvidia, Amazon, Alphabet, Meta Platforms, and Tesla [5][6] - The top 10 holdings in the Vanguard Growth ETF account for 59.5% of the fund, compared to 34.4% in the S&P 500 [7] Performance of "Magnificent Seven" - During the nine-day win streak, all "Magnificent Seven" stocks except Apple outperformed the S&P 500, with notable gains from Tesla, Meta, Microsoft, and Nvidia [8] - Tesla's recent rally was fueled by news of CEO Elon Musk focusing more on the company and the potential for lower-cost models, despite previous poor earnings [12] - Microsoft reported strong revenue growth and margins, driven by AI investments and robust guidance for future quarters [13] - Meta Platforms showed high-margin growth across its apps, with AI investments enhancing engagement and ad performance, leading to increased pricing power [14][15] - Alphabet also reported strong results, benefiting from high-margin growth in services like Google Search and YouTube, while supporting aggressive spending on Google Cloud and AI [16] Industry Trends - The rebound in tech stocks is attributed to a change in sentiment, tariff resolutions, and strong earnings results from major companies [11] - Hyperscalers like Microsoft, Meta, and Alphabet maintained high capital expenditures despite tariff concerns, which is beneficial for Nvidia as they are major customers [17] - Nvidia's stock has been rising due to spending forecasts and easing tariff tensions, although it remains vulnerable to policy changes [18][19] Investment Strategy - The Vanguard Growth ETF offers a low-cost way to gain exposure to leading growth stocks, with a 0.04% expense ratio and a minimum investment of $1 [20] - The ETF has historically outperformed the S&P 500 during periods of growth stock performance, making it an attractive option for investors interested in themes like AI, cloud computing, and digital advertising [21]