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After the closing bell on Tuesday, Amazon (AMZN - Free Report) posted blockbuster results for Q4. The company has emerged a winner, providing an alternative to stores and benefiting from the accelerated adoption of e-commerce driven by video streaming and remote working.
Earnings per share came in at $14.09, almost doubled the Zacks Consensus Estimate of $7.05 and the year-ago earnings of $6.47. Revenues climbed 44% year over year to a record $125.6 billion and edged past the consensus estimate of $120.36 billion. Notably, the e-commerce giant brought in more than $100 billion in revenues for the first time in the company’s history, joining Apple (AAPL - Free Report) , which crossed that milestone in its own earnings results last week (read: Tap Apple ETFs as iPhone 12 Powers $100B Revenues in Q1 Earnings).
In particular, revenues from the cloud computing business — Amazon Web Services — surged 28% year over year to $12.74 billion. The year-over-year growth held steady versus the third quarter but slowed down from the year-ago period.
The company announced that Amazon Web Services CEO Andy Jassy will replace Jeff Bezos as CEO of Amazon in the third quarter.
The company offered an upbeat revenue guidance of $100-$106 billion, suggesting 33-40% year over year growth for the first quarter. The mid-point of the range is above the current Zacks Consensus Estimate of $95.7 billion, which indicates 26.8% growth.
Market Impact
Following the strong results, AMZN shares edged up 1% in aftermarket hours on elevated volume. The stock currently has a Zacks Rank #3 (Hold) and Growth Score of A, suggesting that Amazon is primed for growth (see: all the Consumer Discretionary ETFs here).
Given this, investors could tap Amazon in the form of ETFs with the highest allocation to this Internet giant. Below we have highlighted five of them:
This is the first ETF focused exclusively on retailers that principally sell online or through other non-store channels. It follows the ProShares Online Retail Index, holding 26 stocks in its basket. Amazon is the top firm accounting for about 23.3% of the portfolio. The product has amassed $1.2 billion in its asset base while currently trading in a paltry lower volume of around 187,000 shares a day on average. It charges 58 bps in annual fees from investors (read: 5 ETFs to Pick as Coronavirus Cases Continue to Soar Globally).
Fidelity MSCI Consumer Discretionary Index ETF (FDIS - Free Report)
This fund tracks the MSCI USA IMI Consumer Discretionary Index, holding 277 stocks in its basket. Of these, AMZN takes the top spot with 22.8% share. Internet & direct marketing retail makes up for the top sector with 29.2% share followed by specialty retail (18.6%), and hotels, restaurants & leisure (15.3%). The product has amassed $1.4 billion in its asset base while trading in a good volume of around 175,000 shares a day on average. It charges 8 bps in annual fees from investors and has a Zacks ETF Rank #2 (Buy) with a Medium risk outlook.
Consumer Discretionary Select Sector SPDR Fund (XLY - Free Report)
This product offers exposure to the broad consumer discretionary space by tracking the Consumer Discretionary Select Sector Index. It is the largest and most-popular product in this space, with AUM of nearly $19.3 billion and an average daily volume of around 3.4 million shares. Holding 61 securities in its basket, Amazon takes the top spot with 22.9% of assets. Internet & direct marketing retail dominates about 27.6% of the portfolio, while automobiles, specialty retail, and hotels restaurants and leisure round off the next two spots with a double-digit allocation each. The fund charges 0.12% in expense ratio and has a Zacks ETF Rank #2 with a Medium risk outlook.
This fund currently follows the MSCI US Investable Market Consumer Discretionary 25/50 Index and holds 300 stocks in its basket. Of these, Amazon occupies the top position with 21.6% allocation. Internet & direct marketing retail takes the largest share at 28.3% while automobile manufacturers, restaurants and home improvement retail and round off the next two spots with a double-digit exposure each. VCR charges investors 10 bps in annual fees, while volume is moderate at nearly 111,000 shares a day. The product has managed about $5.3 billion in its asset base and carries a Zacks ETF Rank #2 with a Medium risk outlook.
This fund provides exposure to the 25 largest retail firms by tracking the MVIS US Listed Retail 25 Index. Of these, AMZN takes the top position in the basket with 20.8% share. The product has amassed $207 million in its asset base and charges 35 bps in annual fees. Volume is light as it exchanges nearly 16,000 shares per day. RTH has a Zacks ETF Rank #2 with a Medium risk outlook (read: ETFs to Play as Beginning of Biden Era May Prompt Market Rally).
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5 ETFs to Buy on Amazon's Blockbuster Q4 Earnings
After the closing bell on Tuesday, Amazon (AMZN - Free Report) posted blockbuster results for Q4. The company has emerged a winner, providing an alternative to stores and benefiting from the accelerated adoption of e-commerce driven by video streaming and remote working.
Earnings per share came in at $14.09, almost doubled the Zacks Consensus Estimate of $7.05 and the year-ago earnings of $6.47. Revenues climbed 44% year over year to a record $125.6 billion and edged past the consensus estimate of $120.36 billion. Notably, the e-commerce giant brought in more than $100 billion in revenues for the first time in the company’s history, joining Apple (AAPL - Free Report) , which crossed that milestone in its own earnings results last week (read: Tap Apple ETFs as iPhone 12 Powers $100B Revenues in Q1 Earnings).
In particular, revenues from the cloud computing business — Amazon Web Services — surged 28% year over year to $12.74 billion. The year-over-year growth held steady versus the third quarter but slowed down from the year-ago period.
The company announced that Amazon Web Services CEO Andy Jassy will replace Jeff Bezos as CEO of Amazon in the third quarter.
The company offered an upbeat revenue guidance of $100-$106 billion, suggesting 33-40% year over year growth for the first quarter. The mid-point of the range is above the current Zacks Consensus Estimate of $95.7 billion, which indicates 26.8% growth.
Market Impact
Following the strong results, AMZN shares edged up 1% in aftermarket hours on elevated volume. The stock currently has a Zacks Rank #3 (Hold) and Growth Score of A, suggesting that Amazon is primed for growth (see: all the Consumer Discretionary ETFs here).
Given this, investors could tap Amazon in the form of ETFs with the highest allocation to this Internet giant. Below we have highlighted five of them:
ProShares Online Retail ETF (ONLN - Free Report)
This is the first ETF focused exclusively on retailers that principally sell online or through other non-store channels. It follows the ProShares Online Retail Index, holding 26 stocks in its basket. Amazon is the top firm accounting for about 23.3% of the portfolio. The product has amassed $1.2 billion in its asset base while currently trading in a paltry lower volume of around 187,000 shares a day on average. It charges 58 bps in annual fees from investors (read: 5 ETFs to Pick as Coronavirus Cases Continue to Soar Globally).
Fidelity MSCI Consumer Discretionary Index ETF (FDIS - Free Report)
This fund tracks the MSCI USA IMI Consumer Discretionary Index, holding 277 stocks in its basket. Of these, AMZN takes the top spot with 22.8% share. Internet & direct marketing retail makes up for the top sector with 29.2% share followed by specialty retail (18.6%), and hotels, restaurants & leisure (15.3%). The product has amassed $1.4 billion in its asset base while trading in a good volume of around 175,000 shares a day on average. It charges 8 bps in annual fees from investors and has a Zacks ETF Rank #2 (Buy) with a Medium risk outlook.
Consumer Discretionary Select Sector SPDR Fund (XLY - Free Report)
This product offers exposure to the broad consumer discretionary space by tracking the Consumer Discretionary Select Sector Index. It is the largest and most-popular product in this space, with AUM of nearly $19.3 billion and an average daily volume of around 3.4 million shares. Holding 61 securities in its basket, Amazon takes the top spot with 22.9% of assets. Internet & direct marketing retail dominates about 27.6% of the portfolio, while automobiles, specialty retail, and hotels restaurants and leisure round off the next two spots with a double-digit allocation each. The fund charges 0.12% in expense ratio and has a Zacks ETF Rank #2 with a Medium risk outlook.
Vanguard Consumer Discretionary ETF (VCR - Free Report)
This fund currently follows the MSCI US Investable Market Consumer Discretionary 25/50 Index and holds 300 stocks in its basket. Of these, Amazon occupies the top position with 21.6% allocation. Internet & direct marketing retail takes the largest share at 28.3% while automobile manufacturers, restaurants and home improvement retail and round off the next two spots with a double-digit exposure each. VCR charges investors 10 bps in annual fees, while volume is moderate at nearly 111,000 shares a day. The product has managed about $5.3 billion in its asset base and carries a Zacks ETF Rank #2 with a Medium risk outlook.
VanEck Vectors Retail ETF (RTH - Free Report)
This fund provides exposure to the 25 largest retail firms by tracking the MVIS US Listed Retail 25 Index. Of these, AMZN takes the top position in the basket with 20.8% share. The product has amassed $207 million in its asset base and charges 35 bps in annual fees. Volume is light as it exchanges nearly 16,000 shares per day. RTH has a Zacks ETF Rank #2 with a Medium risk outlook (read: ETFs to Play as Beginning of Biden Era May Prompt Market Rally).
Want key ETF info delivered straight to your inbox?
Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week. Get it free >>