Tech Stocks Under Pressure: 1 Magnificent ETF to Buy on the Dip

July was a choppy period for certain technology stocks. Well-known hyperscalers, like Alphabet and Meta Platforms, saw their share prices dip immediately after reporting second-quarter financials. The investment community also wasn't pleased with Apple's weaker-than-expected fourth-quarter revenue forecast, sending its shares down following its latest financial release.

These big names are under pressure. But it's time for investors to play offense. Here's one magnificent exchange-traded fund (ETF) to buy on the dip.

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Past performance is impressive

Over the last 10 years, the Invesco QQQ Trust (NASDAQ: QQQ) has generated a total return of 572% (as of Aug. 5). This robust performance would have turned an initial $10,000 outlay into more than $67,000 today. This translates to a wonderful 21% annualized gain, which is much better than what the S&P 500 index put up.

This ETF has a strong 66% weighting toward the technology sector. In the past decade, these businesses have driven returns. This should come as no surprise.

Nvidia (NASDAQ: NVDA) deserves to be put under the spotlight. The artificial intelligence (AI) stock's price has skyrocketed 15,230% since early August 2016. In recent years, its revenue and profit growth have been extraordinary, thanks to insatiable demand for its data center chips. At a market capitalization of $5.3 trillion, this is the most valuable company on Earth.

So far in August, the QQQ has recovered nicely. However, it still trades 4% off its peak. Investors should take advantage of the opportunity and buy the dip.

The future is unknown

One of the biggest concerns that investors have right now is valuation. All else equal, higher price-to-earnings or price-to-sales ratios, for instance, result in weaker returns going forward. Investors would prefer to buy stocks at lower valuation multiples, as this increases the potential margin of safety.

No one knows what the future will hold, but it's always wise to operate with a long-term mentality rooted in patience and discipline. This has worked well historically.

Looking ahead, investors who buy the Invesco QQQ Trust are making a bullish bet on the future of AI. There's no way to circumvent this perspective if you're interested in this ETF.

The top 10 positions combine to make up 46% of the entire portfolio's holdings. All these businesses have exposure to AI. This includes the well-known chipmakers and hyperscaler cloud platforms. It also includes Apple, which is staying out of the spending boom, but is integrating AI into its products and services.

While the QQQ's returns might not mimic the past, investors with at least a 10-year time horizon will reap the rewards.

Neil Patel has positions in Invesco QQQ Trust. The Motley Fool has positions in and recommends Alphabet, Apple, Meta Platforms, and Nvidia. The Motley Fool has a disclosure policy.