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What Lies Ahead for Apple ETFs in Fiscal Q2 Earnings?
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The world’s largest mega-cap technology stocks have been in the spotlight after reporting better-than-feared results that lifted market sentiment last week. Four of the five biggest tech players — Microsoft (MSFT - Free Report) , Amazon (AMZN - Free Report) , Meta Platforms (META - Free Report) and Alphabet (GOOGL - Free Report) — came up with strong results (read: ETFs to Bet on Mega-Cap Tech Stocks).
Now, all eyes are on the technology giant Apple (AAPL - Free Report) , which is set to release second-quarter fiscal 2023 results on May 4 after market close. Since Apple accounts for nearly 7% of the total market capitalization of the entire technology sector on the S&P 500 Index, it is worth taking a look at its fundamentals ahead of its quarterly results.
Apple has returned about 30% so far this year, outperforming the industry’s gain of 24.2%. The momentum is expected to continue if the company’s earnings beat estimates in the soon-to-be-reported quarter.
This has put investors’ focus on ETFs having the largest allocation to the tech titan. Technology Select Sector SPDR Fund (XLK - Free Report) , Vanguard Information Technology ETF (VGT - Free Report) , MSCI Information Technology Index ETF (FTEC - Free Report) and iShares US Technology ETF (IYW - Free Report) have Apple as the top or second firm with a double-digit allocation and carry a Zacks Rank #2 (Buy).
Inside Our Methodology
Apple has a Zacks Rank #3 (Hold) and an Earnings ESP of -0.29%. According to our methodology, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 increases the chances of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Apple saw no earnings estimate revision over the past 30 days for the fiscal second quarter. The company has a strong track of positive earnings surprise. It delivered an average earnings surprise of 2.84% in the trailing four quarters. However, the Zacks Consensus Estimate indicates a modest year-over-year decrease of 5.3% for earnings and 4.1% for revenues (see: all the Technology ETFs here).
The stock belongs to a top-ranked Zacks Industry (top 25%) and has a solid Growth Score of A. According to the analysts polled by Zacks, about 88% of the analysts provided a Strong Buy or a Buy rating for Apple ahead of its earnings with a price target of $178.09.
What to Watch?
On the last earnings call, the tech giant forecast fiscal second-quarter year-over-year revenue growth to be similar to the first quarter, adding that sales of Macs and iPads would probably fall by double digits in part because of a “challenging” economic environment.
Technology Select Sector SPDR Fund targets the broad technology sector and follows the Technology Select Sector Index. It holds about 64 securities in its basket, with Apple making up for a 23.7% share. Technology Select Sector SPDR Fund has key holdings in software, technology hardware, storage & peripherals, semiconductors & semiconductor equipment and IT services (read: Will This Be the Final Fed Rate Hike? ETFs to Win).
Technology Select Sector SPDR Fund is the most popular and heavily traded ETF, with AUM of $43.2 billion and an average daily volume of 7 million shares. The fund charges 10 bps in fees per year.
Vanguard Information Technology ETF manages about $46 billion in its asset base and provides exposure to 364 technology stocks. It currently tracks the MSCI US Investable Market Information Technology 25/50 Index. Here, Apple accounts for a 22.7% share. Technology hardware storage & peripheral, systems software, semiconductors and application software are the top three sectors.
Vanguard Information Technology ETF has an expense ratio of 0.10%, while volume is solid at nearly 524,000 shares.
MSCI Information Technology Index ETF is home to 359 technology stocks with AUM of $6 billion. It follows the MSCI USA IMI Information Technology Index. Apple accounts for a 22.6% allocation.
MSCI Information Technology Index ETF has an expense ratio of 0.08%, while volume is solid at 196,000 shares a day.
iShares Dow Jones US Technology ETF tracks the Russell 1000 Technology RIC 22.5/45 Capped Index, giving investors exposure to 139 U.S. electronics, computer software and hardware, and informational technology companies. Apple makes up 19.4% of the assets.
iShares Dow Jones US Technology ETF has AUM of $10.5 billion and charges 39 bps in fees and expenses. Volume is good as it exchanges 636,000 shares a day.
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What Lies Ahead for Apple ETFs in Fiscal Q2 Earnings?
The world’s largest mega-cap technology stocks have been in the spotlight after reporting better-than-feared results that lifted market sentiment last week. Four of the five biggest tech players — Microsoft (MSFT - Free Report) , Amazon (AMZN - Free Report) , Meta Platforms (META - Free Report) and Alphabet (GOOGL - Free Report) — came up with strong results (read: ETFs to Bet on Mega-Cap Tech Stocks).
Now, all eyes are on the technology giant Apple (AAPL - Free Report) , which is set to release second-quarter fiscal 2023 results on May 4 after market close. Since Apple accounts for nearly 7% of the total market capitalization of the entire technology sector on the S&P 500 Index, it is worth taking a look at its fundamentals ahead of its quarterly results.
Apple has returned about 30% so far this year, outperforming the industry’s gain of 24.2%. The momentum is expected to continue if the company’s earnings beat estimates in the soon-to-be-reported quarter.
This has put investors’ focus on ETFs having the largest allocation to the tech titan. Technology Select Sector SPDR Fund (XLK - Free Report) , Vanguard Information Technology ETF (VGT - Free Report) , MSCI Information Technology Index ETF (FTEC - Free Report) and iShares US Technology ETF (IYW - Free Report) have Apple as the top or second firm with a double-digit allocation and carry a Zacks Rank #2 (Buy).
Inside Our Methodology
Apple has a Zacks Rank #3 (Hold) and an Earnings ESP of -0.29%. According to our methodology, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 increases the chances of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Apple saw no earnings estimate revision over the past 30 days for the fiscal second quarter. The company has a strong track of positive earnings surprise. It delivered an average earnings surprise of 2.84% in the trailing four quarters. However, the Zacks Consensus Estimate indicates a modest year-over-year decrease of 5.3% for earnings and 4.1% for revenues (see: all the Technology ETFs here).
The stock belongs to a top-ranked Zacks Industry (top 25%) and has a solid Growth Score of A. According to the analysts polled by Zacks, about 88% of the analysts provided a Strong Buy or a Buy rating for Apple ahead of its earnings with a price target of $178.09.
What to Watch?
On the last earnings call, the tech giant forecast fiscal second-quarter year-over-year revenue growth to be similar to the first quarter, adding that sales of Macs and iPads would probably fall by double digits in part because of a “challenging” economic environment.
ETFs in Focus
Technology Select Sector SPDR Fund (XLK - Free Report)
Technology Select Sector SPDR Fund targets the broad technology sector and follows the Technology Select Sector Index. It holds about 64 securities in its basket, with Apple making up for a 23.7% share. Technology Select Sector SPDR Fund has key holdings in software, technology hardware, storage & peripherals, semiconductors & semiconductor equipment and IT services (read: Will This Be the Final Fed Rate Hike? ETFs to Win).
Technology Select Sector SPDR Fund is the most popular and heavily traded ETF, with AUM of $43.2 billion and an average daily volume of 7 million shares. The fund charges 10 bps in fees per year.
Vanguard Information Technology ETF (VGT - Free Report)
Vanguard Information Technology ETF manages about $46 billion in its asset base and provides exposure to 364 technology stocks. It currently tracks the MSCI US Investable Market Information Technology 25/50 Index. Here, Apple accounts for a 22.7% share. Technology hardware storage & peripheral, systems software, semiconductors and application software are the top three sectors.
Vanguard Information Technology ETF has an expense ratio of 0.10%, while volume is solid at nearly 524,000 shares.
MSCI Information Technology Index ETF (FTEC - Free Report)
MSCI Information Technology Index ETF is home to 359 technology stocks with AUM of $6 billion. It follows the MSCI USA IMI Information Technology Index. Apple accounts for a 22.6% allocation.
MSCI Information Technology Index ETF has an expense ratio of 0.08%, while volume is solid at 196,000 shares a day.
iShares US Technology ETF (IYW - Free Report)
iShares Dow Jones US Technology ETF tracks the Russell 1000 Technology RIC 22.5/45 Capped Index, giving investors exposure to 139 U.S. electronics, computer software and hardware, and informational technology companies. Apple makes up 19.4% of the assets.
iShares Dow Jones US Technology ETF has AUM of $10.5 billion and charges 39 bps in fees and expenses. Volume is good as it exchanges 636,000 shares a day.