10 Best Performing Technology ETFs in 2023

In this article, we discuss 10 best performing technology ETFs in 2023.

In 2023, technology stocks are experiencing a strong surge in value following a significant decline in 2022. However, despite the substantial gains driven partially by the recent hype around artificial intelligence, investors in ETFs are not uniformly rushing to invest in the sector. The movement of money within the technology sector this year has left Todd Sohn, an ETF strategist at Strategas, perplexed. In June 2023, he pointed out the outflow of funds from two major ETFs – the Technology Select Sector SPDR Fund (NYSE:XLK), which mirrors a tech stock index in the S&P 500, and the Invesco QQQ Trust (NASDAQ:QQQ), providing investors exposure to the tech-focused Nasdaq-100 index. Despite both ETFs surging by more than 30% this year following a dismal performance in 2022, Sohn identified the outflows from the Invesco QQQ Trust (NASDAQ:QQQ) in this year as unusual. He noted that even though investors are gravitating toward the smaller, more economical version of the fund, the Invesco NASDAQ 100 ETF (NASDAQ:QQQM), for tech exposure, the substantial gains of the former haven’t been accompanied by a clear trend of herd behavior. Regarding the Technology Select Sector SPDR Fund (NYSE:XLK), ETF investors seem to still harbor “some skepticism” about the recovery of the U.S. equity market from the harsh downturn of the previous year, Sohn commented. 

Dave Nadig, a financial futurist at VettaFi, believes that another profitable stretch awaits in the technology and artificial intelligence space. However, he indicated that there are constraints to the potential upside. Nadig forecasted that the sectors set to experience the most significant growth are industrial, robotics, and automation. He commented: 

“AI is going to have a long-term and significant positive effect on GDP … [But] it’s very difficult to pick public companies that are going to be the outsized beneficiaries of that. We run into this all the time when we have cool new technology … and we end up buying Google and Microsoft and Apple and Nvidia, which we all already probably own too much of.”

NVIDIA Corporation (NASDAQ:NVDA) CEO Jensen Huang expects that the surge in artificial intelligence will extend well into 2024. To substantiate his optimism, he made what could possibly be the largest individual investment in the technology sector. NVIDIA Corporation (NASDAQ:NVDA)’s Q2 financial results exceeded Wall Street’s predictions, and the company disclosed intentions to repurchase an additional $25 billion worth of its own common shares – a strategy commonly employed when a company’s leadership believes its value is underrated. Although NVIDIA Corporation (NASDAQ:NVDA)’s stock price has surged by over threefold this year and was poised to achieve a record peak following Q2 results, the company intends to boost the production of its hardware well into the following year. This has effectively dispelled concerns raised by a few analysts regarding the sustainability of the AI frenzy. Additionally, NVIDIA Corporation (NASDAQ:NVDA) enjoys a near-monopoly over the computing systems that drive services like ChatGPT. 

In this article, we discuss some of the best performing technology ETFs in 2023, which offer investors exposure to Broadcom Inc. (NASDAQ:AVGO), Microsoft Corporation (NASDAQ:MSFT), and DraftKings Inc. (NASDAQ:DKNG). 

Our Methodology 

We used an ETF screener and filtered out the best performing technology ETFs in 2023 based on year-to-date share price performance. We have also discussed the top holdings of the ETFs to offer better insight to potential investors. These ETFs have amassed significant gains in 2023. The list is ranked in ascending order of the year-to-date share price performance of these technology ETFs as of August 24, 2023.

Photo by Austin Distel on Unsplash

Best Performing Technology ETFs in 2023

10. Invesco QQQ Trust (NASDAQ:QQQ)

YTD Share Price Performance as of August 24: 39.82%

From its inception in 1999, Invesco QQQ Trust (NASDAQ:QQQ) has consistently shown a track record of strong performance, often surpassing the S&P 500 Index. Invesco QQQ Trust (NASDAQ:QQQ) tracks the Nasdaq-100 Index and includes prominent technology stocks. The fund features an expense ratio of 0.2% and holds 101 stocks in its portfolio. As of August 23, 2023, Invesco QQQ Trust (NASDAQ:QQQ) has $200.91 billion in assets under management. It is one of the best  performing ETFs in the technology sector. 

Apple Inc. (NASDAQ:AAPL) is the largest holding of Invesco QQQ Trust (NASDAQ:QQQ). On August 3, Apple Inc. (NASDAQ:AAPL) announced financial results for its fiscal 2023 third quarter ended July 1, 2023. The company reported earnings per share of $1.26, beating market estimates by $0.07. The revenue came in line with Wall Street consensus at $81.8 billion. 

According to Insider Monkey’s second quarter database, 135 hedge funds were bullish on Apple Inc. (NASDAQ:AAPL), compared to 131 funds in the preceding quarter. Warren Buffett’s Berkshire Hathaway is the leading position holder in the company, with 915.5 million shares worth $177.6 billion. 

Like Broadcom Inc. (NASDAQ:AVGO), Microsoft Corporation (NASDAQ:MSFT), and DraftKings Inc. (NASDAQ:DKNG), Apple Inc. (NASDAQ:AAPL) is one of the best technology stocks to buy. 

Choice Equities Capital Management made the following comment about Apple Inc. (NASDAQ:AAPL) in its second quarter 2023 investor letter:

“Dramatic valuation differences across market cap sizes continue. This has been the case for some time now. Perhaps I have spent too much time discussing these dichotomies, as generally, I feel like if we pick the right stocks and manage market exposures thoughtfully, our equities- oriented portfolio will prosper across various market cycles. However, when markets become as lopsided as they have lately, I feel additional discussion on the market environment is worthwhile, if only to help highlight the opportunities that are available and the likely path forward. I expect future discussions to soon be focused again on our moderately concentrated portfolio. But for now, let’s take one last in-depth look at how far reaching these valuation dichotomies have again become.(Please note: charts that accompany the following can be found in the Appendix.)

Take Apple Inc. (NASDAQ:AAPL) for example. It is the largest stock by market cap, and fairly considered one of the best companies in the world. The company has been extraordinarily successful and improved standards of living everywhere in the process with their ubiquitous products. Along the way, shareholders have been richly rewarded, with shares increasing nearly fourteen-fold over the last ten years while generating an annualized total shareholder return of 31%, including dividends.

On the back of another big quarter for large cap tech, it is now the first stock to surpass the $3T market cap threshold. This makes its weighting in the ~$37T market cap of the S&P 500, ~8%. It also means this one stock’s market cap is larger than that of the entire ~$2.98T market cap of the Russell 2000 index, the first time in history a single stock has outweighed the Russell 2000 – aside from two brief days in September 2020 when Apple’s market cap then accomplished the same…” (Click here to read the full text)

9. First Trust NASDAQ-100-Technology Sector Index Fund (NASDAQ:QTEC)

YTD Share Price Performance as of August 24: 40.33%

First Trust NASDAQ-100-Technology Sector Index Fund (NASDAQ:QTEC)’s primary goal is to imitate the price and yield performance of the Nasdaq-100 Technology Sector™ Index. The ETF was established on April 19, 2006. As of May 2023, First Trust NASDAQ-100-Technology Sector Index Fund (NASDAQ:QTEC) maintains an expense ratio of 0.57% and its total net assets amount to $1.9 billion. It is one of the best performing technology ETFs in 2023, with year-to-date share price gains of 40.3% as of August 24. 

Lam Research Corporation (NASDAQ:LRCX), the largest holding of First Trust NASDAQ-100-Technology Sector Index Fund (NASDAQ:QTEC), engages in the production, reconditioning, and maintenance of machinery employed in the processing of semiconductors and integrated circuits. On August 24, Lam Research Corporation (NASDAQ:LRCX) declared a $2.00 per share quarterly dividend, a 15.9% increase from its prior dividend of $1.73. The dividend is payable on October 4, to shareholders of record on September 13. 

According to Insider Monkey’s second quarter database, 69 hedge funds were bullish on Lam Research Corporation (NASDAQ:LRCX), compared to 64 funds in the preceding quarter. Rajiv Jain’s GQG Partners is the largest stakeholder of the company, with 2.35 million shares worth $1.5 billion. 

Saltlight Capital made the following comment about Lam Research Corporation (NASDAQ:LRCX) in its second quarter 2023 investor letter:

“Lam Research Corporation (NASDAQ:LRCX), a leading toolmaker for memory and logic semiconductor fabs, has demonstrated its resilience and competitive positioning in the semiconductor ecosystem. Chip densities are now approaching the limits of physics and Moore’s law is stretched to its atomic limitations. Future innovation is around 3D stacks of chips and advanced packaging. LAM has heavily invested in tools that push innovation at the atomic level. Despite this investment, it requires little shareholder capital to grow and therefore it returns capital through healthy dividends and share repurchases. LAM has been a wonderful performer for us over the last two years.”

8. iShares Expanded Tech Sector ETF (NYSE:IGM)

YTD Share Price Performance as of August 24: 41.39%

iShares Expanded Tech Sector ETF (NYSE:IGM) aims to replicate the investment outcomes of the S&P North American Expanded Technology Sector Index, which includes technology sector firms in North America, along with companies from communication services and consumer discretionary sectors. iShares Expanded Tech Sector ETF (NYSE:IGM) was established on March 13, 2001. As of August 23, 2023, the ETF holds net assets amounting to $3.20 billion and features an expense ratio of 0.41%. The fund’s portfolio consists of 280 stocks.

NVIDIA Corporation (NASDAQ:NVDA) is the biggest holding of the iShares Expanded Tech Sector ETF (NYSE:IGM). On August 23, NVIDIA Corporation (NASDAQ:NVDA) reported a Q2 non-GAAP EPS of $2.70 and a revenue of $13.51 billion, topping market expectations by $0.61 and $2.43 billion, respectively.

According to Insider Monkey’s Q2 data, NVIDIA Corporation (NASDAQ:NVDA) was found in 175 hedge fund portfolios, compared to 132 in the prior quarter. Philippe Laffont’s Coatue Management is a prominent stakeholder of the company, with 4.6 million shares worth nearly $2 billion. 

Baron Fifth Avenue Growth Fund made the following comment about NVIDIA Corporation (NASDAQ:NVDA) in its second quarter 2023 investor letter:

“NVIDIA Corporation (NASDAQ:NVDA) Corporation is a fabless semiconductor company focused on designing chips and software for gaming and accelerated computing. Shares continued their torrid first quarter rise, increasing 52.3% in the second quarter (now up 190% year-to-date), after the company reported a meaningful acceleration in demand for its data center GPUs, which drove a material guidance beat with revenues expected to increase from $7.2 billion to approximately $11 billion sequentially. This unprecedented acceleration is driven by growing demand for GenAI. We are at the tipping point of a new era of computing with NVIDIA at its epicenter. While the opportunity within the datacenter installed base is already large at approximately $1 trillion, the pace of innovation in AI in general, and GenAI in particular, should drive a significant expansion in the addressable market, as AI creates a new way for human-computer interaction through language, and as companies are better able to utilize their data for decision-making. We remain shareholders as we believe NVIDIA’s end-to-end AI platform and the ecosystem it has cultivated over the last 15 years will benefit the company for years to come.”

7. ARK Fintech Innovation ETF (NYSE:ARKF)

YTD Share Price Performance as of August 24: 41.78%

ARK Fintech Innovation ETF (NYSE:ARKF) is an actively managed ETF aiming to attain long-term capital appreciation by investing in domestic and international stocks of firms involved in innovative financial technology. Established on February 4, 2019, ARK Fintech Innovation ETF (NYSE:ARKF) comes with an expense ratio of 0.75%. Its portfolio consists of around 35-55 stocks. ARK Fintech Innovation ETF (NYSE:ARKF) is one of the top performing technology ETFs this year. 

Crypto giant Coinbase Global, Inc. (NASDAQ:COIN) is the largest holding of ARK Fintech Innovation ETF (NYSE:ARKF). On August 21, Coinbase Global, Inc. (NASDAQ:COIN) announced that it is investing in Circle, the company behind the creation of USD Coin, a stablecoin pegged to the US dollar. This move by Coinbase Global, Inc. (NASDAQ:COIN) demonstrates its support for stablecoins. 

According to Insider Monkey’s second quarter database, Coinbase Global, Inc. (NASDAQ:COIN) was part of 27 hedge fund portfolios, compared to 28 in the earlier quarter. Cathie Wood’s ARK Investment Management is the biggest stakeholder of the company, with 12.12 million shares worth $867.3 million. 

Here is what Hayden Capital has to say about Coinbase Global, Inc. (NASDAQ:COIN) in its Q2 2022 investor letter:

“Coinbase (NASDAQ:COIN): The crypto ecosystem moves extremely quickly, and there’s been many new developments since we first invested in Coinbase, a year ago. Most notably, crypto market cap has declined from a peak of ~$3 Trillion last fall, to ~$1.1 Trillion today (a -63% decline, and -72% peak-to-trough; LINK). Crypto is a volatile asset class, and has experienced many draw-downs of similar magnitude in the past. For example, Bitcoin was down -93% during 2011, -85% from 2013-15, and -84% from 2017-18. In this context, the latest draw-down is a pretty normal outcome for this emerging asset class.

A large reason for this volatility is simply because there aren’t any major “real-world use cases” for the asset just yet. In our letter outlining the investment last year, we wrote that crypto is still “in the middle of ‘crossing the chasm’ into mainstream adoption & use cases, which will result in millions of mainstream users needing to transact crypto in some form”…” (Click here to see the full text)

6. SPDR NYSE Technology ETF (NYSE:XNTK) 

YTD Share Price Performance as of August 24: 44.86%

SPDR NYSE Technology ETF (NYSE:XNTK)’s objective is to achieve investment outcomes that, prior to deducting fees and costs, closely match the overall return performance of the NYSE Technology Index. This index includes equities within the information technology sector as well as technology-related stocks within the consumer discretionary sector. As of August 24, 2023, the ETF comes with an expense ratio of 0.35%. Its portfolio consists of 35 stocks. SPDR NYSE Technology ETF (NYSE:XNTK) is one of the best performing technology ETFs in 2023. 

Meta Platforms, Inc. (NASDAQ:META) is one of the top holdings of SPDR NYSE Technology ETF (NYSE:XNTK). Following its strong performance in the second quarter and the positive guidance provided, Wall Street analysts showered Meta Platforms, Inc. (NASDAQ:META) with praise. On July 27, Ronald Josey, a Citi analyst, reaffirmed a Buy recommendation on Meta Platforms, Inc. (NASDAQ:META). He highlighted the impressive reception of fresh advertising formats such as Sponsored Reels and the popularity of Click-to-WhatsApp among advertisers.

According to Insider Monkey’s second quarter database, 225 hedge funds were long Meta Platforms, Inc. (NASDAQ:META), compared to 220 funds in the prior quarter. Chase Coleman’s Tiger Global Management is the leading stakeholder of the company, with 8.5 million shares worth $2.45 billion. 

In addition to Broadcom Inc. (NASDAQ:AVGO), Microsoft Corporation (NASDAQ:MSFT), and DraftKings Inc. (NASDAQ:DKNG), Meta Platforms, Inc. (NASDAQ:META) is one of the best tech stocks to invest in. 

Giverny Capital Asset Management made the following comment about Meta Platforms, Inc. (NASDAQ:META) in its second quarter 2023 investor letter:

“I have believed for a while that we’re better served with a lower weight to the tech giants – we own Alphabet (8.1% of our model portfolio at the end of June) and Meta Platforms, Inc. (NASDAQ:META) (5.2%) for a 13.3% exposure, or about half the Index’s weight in the giants. And while Alphabet’s 36% return for the first half and Meta’s 138% return were gratefully received, I’m pleased to report that if we strip out that contribution to our overall return, the other 23 stocks we own, constituting 85% of our portfolio (with cash making up the balance), were up 10.2% on a weighted basis.

GCAM owns two of the seven tech mega caps in Alphabet and Meta, and they enjoyed similar rises. As mentioned, Alphabet A&C shares rose 36% while Meta rose 138%. Together, they added 2.38 percentage points to the overall Index return, meaning these seven tech giants cumulatively generated 12.4 percentage points of return, or roughly three-quarters of the Index’s return.

Alphabet and Meta combined sport a $2.25 trillion market cap and between them should generate roughly $120 billion of pretax profit this year. That’s a multiple of 19 times pretax profit, a substantial discount to Microsoft and Apple, and an even larger discount to Amazon, Nvidia and Tesla.”

5. iShares Semiconductor ETF (NASDAQ:SOXX)

YTD Share Price Performance as of August 24: 45.35%

iShares Semiconductor ETF (NASDAQ:SOXX)’s primary objective is to replicate the investment outcomes of the ICE Semiconductor Index, which comprises American equities within the semiconductor industry. The fund’s inception date was July 10, 2001. As of August 23, 2023, iShares Semiconductor ETF (NASDAQ:SOXX)’s portfolio contains 30 stocks and features an expense ratio of 0.35%. It is one of the best performing technology ETFs to invest in. 

Broadcom Inc. (NASDAQ:AVGO), a California-based semiconductor company, is one of the top holdings of the iShares Semiconductor ETF (NASDAQ:SOXX). On June 1, Broadcom Inc. (NASDAQ:AVGO) reported a Q2 non-GAAP EPS of $10.32 and a revenue of $8.73 billion, outperforming Wall Street estimates by $0.18 and $20 million, respectively. The company also repurchased 5.6 million common shares valued at $3,420 million. 

According to Insider Monkey’s second quarter database, 72 hedge funds were bullish on Broadcom Inc. (NASDAQ:AVGO), with Rajiv Jain’s GQG Partners holding a prominent stake in the company, comprising 1.10 million shares worth $955.7 million. 

Here is what Aristotle Atlantic Partners has to say about Broadcom Inc. (NASDAQ:AVGO) in its Q2 2023 investor letter:

“Broadcom contributed to outperformance, as the company is seen as a key beneficiary of the investment in generative Artificial Intelligence (AI) and Large Language Models (LLM). The company’s Application-Specific Integrated Circuit (ASIC) chips are being custom-built for customers to use in their data centers for accelerated computing. Broadcom’s networking chipsets are also expected to see increased levels of demand, as customers increase investments to enable the high-speed data transfer required by advanced AI training and inference. The company also announced a new multi-year supplier relationship with Apple, the company’s largest customer.”

4. iShares U.S. Technology ETF (NYSE:IYW)

YTD Share Price Performance as of August 24: 46.54%

The main objective of the iShares U.S. Technology ETF (NYSE:IYW) is to replicate the investment performance of the Russell 1000 Technology RIC 22.5/45 Capped Index, which consists of U.S. technology sector equities. This index offers exposure to American firms in electronics, computer software and hardware, and information technology sectors. iShares U.S. Technology ETF (NYSE:IYW) was introduced on May 15, 2000. As of August 24, 2023, the fund holds a portfolio comprising 136 stocks, and its net assets are valued at $10.8 billion. It features an expense ratio of 0.39%. iShares U.S. Technology ETF (NYSE:IYW) is one of the best performing ETFs in the technology sector. 

Microsoft Corporation (NASDAQ:MSFT) is one of the top holdings of the iShares U.S. Technology ETF (NYSE:IYW). The acquisition of Activision Blizzard, Inc. (NASDAQ:ATVI) by Microsoft Corporation (NASDAQ:MSFT) for $69 billion is expected to be finalized around the beginning of October. This follows Microsoft’s submission of an updated agreement to the UK antitrust authority. There’s a chance that the European Union might request Microsoft to resubmit the deal, but this outcome remains uncertain presently.

According to Insider Monkey’s second quarter database, 300 hedge funds were bullish on Microsoft Corporation (NASDAQ:MSFT), compared to 289 funds in the prior quarter. Bill & Melinda Gates Foundation Trust is the largest stakeholder of the company, with 39.2 million shares worth $13.3 billion. 

Mairs & Power Growth Fund made the following comment about Microsoft Corporation (NASDAQ:MSFT) in its second quarter 2023 investor letter:

“Regarding stock selection in the first half, Nvidia (NVDA) was a massive outperformer, up 189.54%. Amazon and Microsoft Corporation (NASDAQ:MSFT) were also positive contributors, up 55.19% and 42.66%, respectively. All three stocks benefited from a renewed interest in growth stocks by investors in the first half of the year.

Microsoft (MSFT) was another positive contributor to performance in the first half. The company continued to take share in cloud computing. Its strong relationships with customers, as well as knowledge of their businesses, differentiates its offering, which is also helped by leading investments in AI. We expect the company will continue to integrate AI tools into most of its productivity suite of software in the not-too-distant future. This should help with employee productivity and the labor constraints of most of its customers.”

3. ARK Next Generation Internet ETF (NYSE:ARKW)

YTD Share Price Performance as of August 24: 47.52%

ARK Next Generation Internet ETF (NYSE:ARKW) is one of the best performing ETFs in the technology space. ARK Next Generation Internet ETF (NYSE:ARKW) is an actively managed ETF aiming to invest in the theme of next-generation internet. The companies included in ARKW are concentrated on the transition of technology infrastructure to cloud-based platforms. Established on September 30, 2014, the ETF holds net assets valued at $1.65 billion as of July 31, 2023, and offers an expense ratio of 0.88%. 

ARK Next Generation Internet ETF (NYSE:ARKW) is heavily invested in Roku, Inc. (NASDAQ:ROKU), a California-based company operating a TV streaming platform. On July 27, Roku, Inc. (NASDAQ:ROKU) reported a Q2 GAAP EPS of -$0.76 and a revenue of $847 million, outperforming Wall Street estimates by $0.51 and $72.47 million, respectively. There were 73.5 million active accounts in Q2, representing a growth of 1.9 million accounts from Q1 2023. Roku’s total streaming hours reached 25.1 billion, indicating an annual increase of 4.4 billion hours.

According to Insider Monkey’s second quarter database, 29 hedge funds were bullish on Roku, Inc. (NASDAQ:ROKU), compared to 27 funds in the earlier quarter. Cathie Wood’s ARK Investment Management is the leading position holder in the company, with approximately 12 million shares worth $764.85 million. 

Here is what Saga Partners has to say about Roku, Inc. (NASDAQ:ROKU) in its Q2 2022 investor letter:

“The Portfolio first bought Roku in Q3’20. It was a company we followed closely given our investment in The Trade Desk and its importance in connected television (CTV). Roku continued to impressively grow its CTV market share and it took some extra work to understand the underlying dynamics causing Roku’s success. I think there is some misunderstanding surrounding the connected television landscape. Since I haven’t written extensively on the topic in past letters, I thought it would be helpful to provide a little more background on the underlying dynamics of the space below…” (Click here to see the full text)

2. VanEck Semiconductor ETF (NASDAQ:SMH)

YTD Share Price Performance as of August 24: 52.68%

VanEck Semiconductor ETF (NASDAQ:SMH)’s goal is to imitate the price and yield results of the MVIS® US Listed Semiconductor 25 Index. This index is designed to monitor the collective performance of companies engaged in semiconductor manufacturing and equipment. VanEck Semiconductor ETF (NASDAQ:SMH) was founded on December 20, 2011. As of August 24, 2023, the total net assets of the fund stand at $9.63 billion, along with an expense ratio of 0.35%. It is one of the best performing ETFs in the tech space.

Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) is a prominent holding of VanEck Semiconductor ETF (NASDAQ:SMH). On July 20, Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) reported a Q2 GAAP EPADR of $1.14 and a revenue of $15.68 billion, outperforming Wall Street estimates by $0.06 and $300 million, respectively. 

According to Insider Monkey’s second quarter database, 121 hedge funds were bullish on Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM), compared to 102 funds in the prior quarter. Jean-Marie Eveillard’s First Eagle Investment Management is the largest stakeholder of the company, with 9 million shares worth $914 million. 

Baron Emerging Markets Fund made the following comment about Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) in its first quarter 2023 investor letter:

“Semiconductor giant Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) contributed in the first quarter due to easing geopolitical concerns and expectations for end-demand recovery later in 2023. We retain conviction that Taiwan Semi’s technological leadership; pricing power; and exposure to secular growth markets, including high-performance computing, automotive, 5G, and IoT; will allow the company to sustain strong earnings growth over the next several years.”

1. SoFi Web 3 ETF (NASDAQ:TWEB)

YTD Share Price Performance as of August 24: 59.45%

The objective of the SoFi Web 3 ETF (NASDAQ:TWEB) is to replicate the performance, prior to fees and expenses, of the SoFi Solactive ARTIS® Web 3.0 Index. The index tracks equities listed on US, developed markets, and South Korean securities exchanges. The underlying index invests in four thematic categories – Big Data & Artificial Intelligence, Blockchain Technology, Metaverse, and NFT & Tokenization. SoFi Web 3 ETF (NASDAQ:TWEB) was established on August 8, 2022. Currently, it manages $1.35 million in assets and carries an expense ratio of 0.59%. It is one of the best performing technology ETFs in 2023. 

DraftKings Inc. (NASDAQ:DKNG), an American digital sports entertainment and gaming company, is the largest holding of SoFi Web 3 ETF (NASDAQ:TWEB). On August 3, DraftKings Inc. (NASDAQ:DKNG) reported a Q2 non-GAAP EPS of $0.14 and a revenue of $875 million, outperforming market expectations by $0.28 and $112.16 million, respectively. 

According to Insider Monkey’s second quarter database, 40 hedge funds were long DraftKings Inc. (NASDAQ:DKNG), compared to 37 funds in the preceding quarter. 

Baron Discovery Fund made the following comment about DraftKings Inc. (NASDAQ:DKNG) in its Q1 2023 investor letter:

“We re-initiated a position in the former Fund holding DraftKings Inc. (NASDAQ:DKNG), a leading online sportsbook, digital casino, and daily fantasy sports operator. DraftKings’ mobile applications offer consumers the ability to wager on a wide variety of sporting events and play hundreds of real-money casino games. The company has spent the past three years building a proprietary technology stack that improves the customer experience and delivers best-in-class breadth of bet types (such as parlays, same-game parlays, and player props). State-level online sports betting (OSB) and iCasino legalization, along with a multi-year consumer adoption timeline in active states, has supported a 90% revenue growth rate for DraftKings since 2020. The opportunity for OSB legalization remains significant, with under 50% of the U.S. population currently having legal mobile sports betting. We expect 65% to 80% of the population will eventually have access to OSB. ICasino is currently legal in just seven states representing roughly 13% of the population. ICasino product adoption in legalized states has been robust, with the average user spending twice as much as a sports bettor. While the pace of legalization for iCasino has been slower, we believe additional states will pass regulation in the coming years.

As U.S. states began to legalize sports betting, the DraftKings management team moved quickly to build widespread brand awareness. DraftKings is the #2 operator in both OSB and iCasino by a wide margin, and has demonstrated improving market share trends across almost all states. When a new state legalizes sports betting, DraftKings has a first mover advantage as many of its customers are converted from the DraftKings daily fantasy sports offering. The quality of their sportsbook product along with increasingly targeted promotional spending results in strong customer retention and high lifetime values. In states where iCasino is legal, DraftKings can cross-sell OSB customers. DraftKings’ scale and product advantages are creating a flywheel that will enable the company to continue to out-invest the competition in acquisition marketing, retention, and research and development. The high barriers to entry are resulting in a consolidated industry that will eventually lead to a highly profitable business. This is evidenced by older-vintage state contribution margins that are already approaching 40%. Longer term, we believe DraftKings can generate EBITDA margins between 20% and 30% with strong free-cash-flow conversion.”

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Disclosure: None. 10 Best Performing Technology ETFs in 2023 is originally published on Insider Monkey.