New York, June 2, 2026 – Invesco's Nasdaq-100 ETF QQQM edged up 0.2% to $306.54 in late-morning trading Tuesday, supported by robust inflows and gains in key AI-linked holdings. According to TipRanks, the fund attracted $835.44 million in net inflows over the past five days, reflecting sustained investor appetite for large-cap technology stocks tied to artificial intelligence.
The inflows were primarily fueled by optimism surrounding AI giants such as Nvidia (NVDA), Apple (AAPL), and Microsoft (MSFT). Nvidia rose 0.8% on the day, providing a lift to the broader Nasdaq-100 complex. The larger Invesco QQQ Trust (QQQ) also traded modestly higher, up 0.2%, while the SPDR S&P 500 ETF (SPY) gained 0.1%.
Zscaler's Guidance Shock
However, the AI trade faced a reality check from Zscaler (ZS), which plunged 8.9% to $141.90 after issuing disappointing guidance. The cybersecurity firm reported fiscal third-quarter revenue of $850.5 million, up 25% year-over-year, and annual recurring revenue of $3.525 billion, also up 25%. CEO Jay Chaudhry emphasized Zscaler's position as a key platform for the AI era, citing its Zero Trust SASE architecture. CFO Kevin Rubin noted record profitability, with non-GAAP operating margins of 23%.
Yet, the company's outlook for the fiscal fourth quarter fell short. Zscaler projected revenue of $875 million to $878 million and lowered its full-year free cash flow margin forecast to 22.8%-23.3%, down from a prior range of 26.5%-27%, due to higher capital spending. The stock had recovered slightly on Monday after Guggenheim upgraded it to Buy from Neutral, setting a $214 price target, but the guidance weighed heavily on sentiment.
Volatility in Concentrated Growth Funds
The divergence between QQQM's inflows and Zscaler's decline underscores the risks inherent in concentrated growth funds. While QQQM provides broad exposure to the Nasdaq-100, its performance is heavily dependent on a handful of large-cap names. Quiver Quantitative noted that QQQ fell 0.5% on May 27, driven by a 31.3% drop in Zscaler, along with losses in Nvidia, Intel, Qualcomm, AMD, and Microsoft.
Investors continue to pour money into AI-focused ETFs despite sharp reversals in individual stocks. The QQQM's five-day inflow of $835 million highlights the persistent demand for AI exposure, even as software and cybersecurity stocks face execution risks. The fund's regulatory filings indicate it seeks to track the Nasdaq-100 Index before fees and expenses, investing at least 90% of assets in the index's securities, which cover 100 of the largest non-financial companies listed on Nasdaq.
Competitive Landscape
The Nasdaq-100 ETF market is becoming more competitive. Reuters reported in April that BlackRock filed to launch an iShares Nasdaq-100 ETF under the ticker IQQ, directly challenging Invesco's QQQ lineup. QQQM is virtually identical to QQQ, one of the oldest and most-traded Nasdaq-100 products, making it a key benchmark for investors.
Zscaler's warning about macroeconomic instability, AI-related platform risks, execution challenges, and fast-changing competition in network security serves as a reminder that AI-linked multiples leave little room for disappointment. Inflows can reverse quickly, and the push and pull between AI enthusiasm and stock-level volatility remains a defining feature of the current market.
