Technology giant Apple (AAPL Quick QuoteAAPL - Free Report) is set to release second-quarter fiscal 2020 results on Apr 30 after market close. Since Apple accounts for more than 19% of total market capitalization of the entire technology sector in the S&P 500 Index, it is worth taking a look at its fundamentals ahead of its quarterly results.

Apple has lost about 14.1% over the past three months and underperformed the industry’s loss of 12.8%. However, the technology giant might gain momentum if the company beats estimates in the soon-to-be reported quarter (see: all the Technology ETFs here).



Inside Our Methodology

Apple has a Zacks Rank #3 (Hold) and an Earnings ESP of +2.07%. 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 negative earnings estimate revision of a couple of cents over the past 30 days for the fiscal second quarter. The Zacks Consensus Estimate indicates a modest year-over-year decrease of 15.4% for earnings and 7.9% for revenues. However, the company has a strong track record of positive earnings surprise. It delivered an average positive earnings surprise of 6.05% in the trailing four quarters.

Apple Inc. Price, Consensus and EPS Surprise

Apple Inc. price-consensus-eps-surprise-chart | Apple Inc. Quote

The stock has a solid Growth Score of A but belongs to a bottom-ranked Zacks Industry (bottom 31%). The Zacks Consensus Estimate for average target price is $312.31 with nearly 81% of the analysts giving a Strong Buy or a Buy rating for Apple ahead of the company’s earnings.

What to Watch?

As the coronavirus pandemic raised demand for e-commerce, investors will closely watch Apple services revenues, which includes iTunes, Apple Music, iCloud, Apple Pay and Apple Care. In February, Apple warned that it would not meet its guidance for the fiscal second quarter as coronavirus outbreak hit its iPhones production (read: ETFs to Tap on Soaring E-Commerce Sales Amid Coronavirus).

According to the Wall Street Journal, Apple will delay mass production of its next iPhone models — iPhone 12 — by about a month. This is because the pandemic has weakened global consumer demand and disrupted manufacturing across Asia.

ETFs in Focus

ETFs having the highest allocation to this tech titan will be in focus going into its earnings announcement. While there are several ETFs in the space with Apple in their top 10 holdings, we have highlighted the ones that have Apple as the top or the second firm with a double-digit allocation:

Select Sector SPDR Technology ETF (XLK Quick QuoteXLK - Free Report) – The fund has AUM of $26 billion and a Zacks ETF Rank #1. Apple makes up for 19.4% of the assets (read: Buy the Dip in Tech ETFs).

MSCI Information Technology Index ETF (FTEC Quick QuoteFTEC - Free Report) – This fund has a Zacks ETF Rank #1 and AUM of $3.3 billion. Apple has 18.4% allocation.

Vanguard Information Technology ETF (VGT Quick QuoteVGT - Free Report) – It has AUM of $25.5 billion and sports a Zacks ETF Rank #1. Here, AAPL takes 18.3% share.

iShares Dow Jones US Technology ETF (IYW Quick QuoteIYW - Free Report) – The fund has amassed $4.7 billion in its asset base and carries a Zacks ETF Rank #1. Apple accounts for 17.3% of the assets.

iShares Global Tech ETF (IXN Quick QuoteIXN - Free Report) - The product has accumulated $3.1 billion in its asset base. Apple accounts for 15.6% allocation.

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