NEW YORK, July 23, 2026, 12:15 EDT – The ProShares UltraPro QQQ (NASDAQ:TQQQ) experienced a sharp midday decline on Thursday, falling 5.9% as of noon, while the Invesco QQQ Trust (NASDAQ:QQQ) dropped 1.9%. This resulted in a leverage ratio of approximately 3.03 times, closely matching TQQQ's stated objective of delivering triple the daily performance of the Nasdaq-100 Index.
Over a longer time horizon, the effects of leverage become more complex. Data released on July 16 shows that TQQQ generated a total return of 142% over the past five years, compared to QQQ's 105% gain. These figures translate to annualized returns of roughly 19.3% for TQQQ and 15.4% for QQQ, a difference of 3.9 percentage points. An initial $10,000 investment in TQQQ would have grown to approximately $24,200, while the same amount in QQQ would have reached $20,500, giving TQQQ an 18% advantage.
The inverse leveraged ETF, ProShares UltraPro Short QQQ (NASDAQ:SQQQ), rose 5.9% on Thursday as the Nasdaq-100 declined. However, over the past five years, SQQQ has suffered a total loss of 96%, turning a $10,000 investment into roughly $500.
ProShares emphasizes that TQQQ aims to achieve three times the daily return of the Nasdaq-100, and SQQQ seeks three times the inverse daily return. These targets reset each day, meaning compounding can dramatically alter long-term results. For instance, after a 10% decline, an 11.1% gain is needed to break even, but a 3x leveraged fund would remain down 6.7% over two such sessions, excluding fees.
Thursday's decline was fueled by heavy losses in major Nasdaq-100 components. Alphabet Inc. (NASDAQ:GOOGL) dropped 6.5% after reporting its first-ever negative free cash flow of $5.9 billion and raising its 2026 capital expenditure guidance to a range of $195 billion to $205 billion. "Following a quarter with negative cash flow, Alphabet's increased capital expenditures are concerning," said Thomas Monteiro, senior analyst at Investing.com, as reported by Reuters.
Tesla Inc. (NASDAQ:TSLA) also contributed to the sell-off, falling 13.2% after posting negative free cash flow of $1.1 billion, with quarterly capital expenditures of $5.8 billion.
Expense ratios further widen the gap between leveraged and non-leveraged funds over time. QQQ carries a 0.18% expense ratio, while TQQQ's is 0.82% and SQQQ's is 0.95%. Over a decade, QQQ has delivered a total return of 558% through July 21, turning $10,000 into nearly $66,000. In comparison, the S&P 500 returned 305% over the same period, with annualized gains of approximately 20.7% for QQQ and 15.0% for the S&P 500.
The risks of leveraged ETFs are symmetric. TQQQ can amplify gains in sustained uptrends but can also accelerate losses during sharp downturns. Similarly, SQQQ can erode value quickly when the Nasdaq-100 rises. The daily multiplier worked as intended on Thursday, but the five-year holding period highlights how volatility and sequence of returns matter significantly for leveraged products.
