QQQ Stock Is Down 12% From Its High and Michael Burry Already Shorted It — Here Is the Case for Buying Anyway

The way QQQ usually acts in a poor market has an almost theatrical quality. When stocks are struggling, it doesn’t steadily decline like a bond fund might or remain stable like consumer staples ETFs occasionally do. It moves in tandem with the drama of its constituent companies, which include Nvidia, Apple, Microsoft, Amazon, Tesla, and Meta. These companies are all well-known and have the power to move the entire fund by a percentage point on either a weak guidance call or a strong earnings beat. QQQ ended the day down $11.21 on March 27 at $562.58. For a fund that trades tens of millions of shares every day and has $395 billion in assets, that represents a single-session loss of almost two percent. The ETF is among the most liquid securities available by practically every metric. Additionally, it is currently among the more uncomfortable to hold.
When QQQ first launched in March 1999, it was right in the middle of the dot-com boom, when tech CEOs were being hailed as cultural heroes and the Nasdaq appeared to be operating outside of standard valuation guidelines. The fund was nearly effortless for a while. After the bubble burst, QQQ’s value dropped by more than 80%. In 2004, it changed its ticker to QQQQ, which in hindsight seems like the institutional equivalent of changing your name after a humiliating time. However, it went back to QQQ in 2011, when enough time had gone by and enough healing had taken place for the original identity to feel secure once more. It hit a new record high by June 2020. It took about 20 years to complete the arc, from pre-crash peak to post-crash record. Eventually, patient investors who remained were compensated. They weren’t impatient.
The current state of affairs is not exactly the same as it was in 2000, but it also has some similarities. Currently trading at $562.58, QQQ is twelve percent below its fifty-two-week high of $637.01 and below its fifty-day moving average of about $606. The five-hour, weekly, and daily technical indicators are all showing “Strong Sell.” According to the monthly indicator, “Strong Buy.” On one level, the discrepancy between short-term and long-term signals is simply mathematical: moving averages are pointing in different directions because the longer-term trend is unchanged while the recent trend is declining. On a deeper level, it perfectly sums up this fund’s situation in early 2026: a long-term winner navigating a short-term mess.

There are several parts to the mess. Due to the Iran war and the partial closure of the Strait of Hormuz, oil prices have skyrocketed and are now contributing to inflation expectations, which is particularly detrimental to growth stocks. A three-month low has been reached in consumer sentiment. Inflation projections for the upcoming year surged to 3.8 percent, the largest monthly increase since April 2025. Because nearly all of QQQ’s top ten holdings are businesses whose valuations are based on future earnings—which lose value in present-value terms when inflation and yields rise—all of that directly affects QQQ. On March 27, Nvidia, which accounts for 8.56 percent of the fund, saw a 2.17 percent decline. At 7.64 percent, Apple, the second-largest holding, saw a 1.62 percent decline. During the same session, Microsoft, Amazon, and Meta all saw drops of 2.5–4%. The fund will have a difficult close if the top five positions each lose two to four percent in a single day.
A layer that was absent from earlier downturns is added by the AI disruption story. Some parts of the market are worried that AI might eat into some of QQQ’s most significant software holdings’ revenue streams. They believe that tools like Gemini, Claude, and GPT-4o will eventually replace subscription software in ways that reduce profit margins at firms like Microsoft and Salesforce. How accurate this is and when it might be relevant are still unknown. However, due to the fund’s concentration in those specific names, the anxiety is real enough to manifest in the price action of individual names, and it directly affects QQQ.
However, institutional investors are not avoiding it. That is noteworthy. During the fourth quarter, Bell Bank expanded its holdings in QQQ, making it the bank’s fourth-largest holding at 9.3% of the total portfolio. In recent months, Navigoe LLC and PayPay Securities both added shares. The percentage of institutional ownership is approximately 44.58 percent. That is more akin to smart money who has previously seen this film and is opting to remain in the theater than it is to smart money who has lost confidence.
In 2023, Michael Burry shorted QQQ. His 2023 wager against the fund attracted a lot of attention, and he is well-known for being correct about the 2008 housing collapse. The fund saw a sharp increase following the disclosure of his position, suggesting that he was either early, incorrect, or both. That does not imply that if he continues to be doubtful, he will be mistaken once more. However, it serves as a helpful reminder that, even when the short-term charts are pointing downward, QQQ has a strong historical tendency to punish the conviction of those who bet against it.
It is difficult to ignore the fact that, at $562, the fund has survived the worst technology crash in history, returned more than a thousand percent since its founding in 1999, and continues to hold nearly $400 billion in assets from investors who have chosen to put their trust in it. Views on AI, oil, inflation, and geopolitical resolution—all of which are currently unpredictable—will determine whether the current decline is a warning or an entry point. The fund’s twenty-seven-year history does indicate that writing it off at $562 is an old wager that hasn’t always held up well.