Forget QQQ: 3 Sector ETFs Quietly Outperforming Tech by a Mile in 2026

Quick Read

• Global X Defense Tech (SHLD) up 72%, Tema Electrification (VOLT) up 62% and 14.6% YTD, Procure Space (UFO) up 101% past year vs Invesco QQQ (QQQ). Rocket Lab (RKLB) $40B, SpaceX $1.75T IPO, Tesla (TSLA).

• Defense budgets expand toward $1.5T, AI data center buildout strains power grids, and SpaceX prepares a $1.75T IPO, driving specialized sector ETFs past traditional tech indexes.

• The analyst who called NVIDIA in 2010 just named his top 10 AI stocks. Get them here FREE.

The tech sector is now massive, and buying the Invesco QQQ Trust (NASDAQ:QQQ) alone does not cut it. Instead, you should dig deeper and buy Global X Defense Tech ETF (NYSEARCA:SHLD), Tema Electrification ETF (NASDAQ:VOLT), and Procure Space ETF (NASDAQ:UFO), which are outperforming the broader tech stocks significantly.

But why should you diversify out of the QQQ in the first place? The most compelling rationale for me is that it only holds some 100 stocks. Tech has grown beyond that. A larger and larger share of people are spending their time on their screens, and sticking to just the biggest few dozen names will not make your portfolio stand out.

You could rather look into sector ETFs that are tech-adjacent or are set to see long-term demand. This will help you broaden your horizons beyond the stocks everyone else is looking at and likely boost your gains at the same time.

READ: The analyst who called NVIDIA in 2010 just named his top 10 AI stocks

Global X Defense Tech ETF (SHLD)

If there’s one clear thing, it is the fact that governments worldwide will keep pouring money into their militaries. Early last year, investors were deeply pessimistic about austerity and the potential 8% annual cuts to the defense sector. The complete opposite is what has been happening, with Trump proposing a $1 trillion defense budget last year. This year, he’s proposing a $1.5 trillion budget for fiscal year 2027.

That’s an extraordinary amount of money, but one that can be approved due to extraordinary circumstances. Even $1 trillion is enough to boost military stocks significantly, and that’s what the Global X Defense Tech ETF gets you exposure to. SHLD’s holdings span everything from traditional military stocks to companies involved in software, sensors, AI, chips, networking, cybersecurity, and drone systems.

SHLD stock is up nearly 72% in the past year.

These wars no longer seem to have stringent congressional bottlenecks and are also extremely expensive. Cuba stands next on the crosshairs, so I’d buy up more SHLD stock.

Tema Electrification ETF (VOLT)

The Tema Electrification ETF leans into the electricity demand by AI data centers. It’s no secret that there’s a large, ongoing buildout of data centers, but what remains a secret still is just how much power this will draw from the grid. AI could consume 10% of the U.S. electricity supply by 2030.

On paper, 10% doesn’t sound like much.

However, you should keep in mind that these data centers demand stable, high-capacity, high-throughput power. The current grid is not suited to support that and needs extensive upgrades. Plus, 2030 is just five years from now. Power consumption by AI could rise well beyond 10%.

VOLT ETF is up 62% in the past year and up 14.6% year-to-date already. I see further gains ahead this year as the data center buildout shows no sign of a slowdown. Tema Electrification ETF’s exposure to the tech sector sits at just 16.9%. ~70% of this fund is built around industrial and utility stocks. It’s very impressive that a fund made up of these stocks can end up outperforming the QQQ twice over.

The expense ratio is 0.75%, which is quite low for a growth ETF of this caliber.

Procure Space ETF (UFO)

Perhaps the most underrated ETF right now is the Procure Space ETF. I say that despite the UFO ETF rising by nearly 101% in the past year. My rationale is that SpaceX is about to undergo an IPO, and this can re-rate the whole space sector higher. We’re looking at a valuation of $1.75 trillion. One of SpaceX’s main competitors, Rocket Lab (NASDAQ:RKLB), trades at just $40 billion.

Of course, the valuation goes beyond just space, and a lot of that IPO valuation stems from SpaceX now owning xAI. However, murmurs of a SpaceX IPO this year were circling well before that happened. The valuations cited back then were sometimes in excess of $1 trillion, even without xAI, so we’re looking at a monster IPO for this sector.

You should also remember that SpaceX is rapidly growing and profitable. It might end up overshadowing Tesla (NASDAQ:TSLA) quickly due to the AI factor, plus how much demand space is getting. Apart from this SpaceX IPO, there’s the Golden Dome project. That’s a project that could cost “anywhere from $252 billion to $3.6 trillion”. Even the lower end of the quote will be a boon for space stocks.

Hence, I’d buy before the next triple-digit leg up.

The expense ratio of 0.94% is negligible against the gains.

The analyst who called NVIDIA in 2010 just named his top 10 AI stocks

Wall Street is pouring billions into AI, but most investors are buying the wrong stocks. The analyst who first identified NVIDIA as a buy back in 2010 — before its 28,000% run — has just pinpointed 10 new AI companies he believes could deliver outsized returns from here. One dominates a $100 billion equipment market. Another is solving the single biggest bottleneck holding back AI data centers. A third is a pure-play on an optical networking market set to quadruple. Most investors haven’t heard of half these names. Get the free list of all 10 stocks here.