After the closing bell yesterday, Oracle (ORCL - Free Report) reported lackluster first-quarter fiscal 2024 results. The software giant provided downbeat guidance, citing strong competition in the cloud-computing industry and a digital spending pullback. However, it beat earnings estimates.
Shares of Oracle declined as much 10% in pre-market trading today and are on track to shed about $30 billion in market value. This has put ETFs with the highest allocation to this software giant in focus. These include iShares Expanded Tech-Software Sector ETF (IGV), Qraft AI-Enhanced U.S. Large Cap Momentum ETF (AMOM - Free Report) , Fidelity Cloud Computing ETF (FCLD - Free Report) , iShares U.S. Tech Independence Focused ETF (IETC - Free Report) , and First Trust NASDAQ Technology Dividend Index Fund (TDIV - Free Report) .
Oracle Earnings in Focus
Earnings per share came in at 95 cents, outpacing the Zacks Consensus Estimate by 5 cents. Revenues rose 9% year over year to $12.45 billion, in line with estimates. The substantial revenue growth was powered by infrastructure and applications cloud businesses that grew 64% and 17%, respectively (see: all the Technology ETFs here).
Cloud revenues jumped 30% to $4.6 billion in the fiscal first quarter. Revenues from the two strategic cloud applications businesses, namely Fusion and NetSuite Cloud ERP applications, grew 21% each during the quarter. Oracle Fusion is the world's biggest cloud ERP business, while Oracle NetSuite is the second-biggest cloud ERP business.
For the ongoing quarter, Oracle expects revenues to grow 5-7% and adjusted earnings per share in the range of $1.30 to $1.34. The Zacks Consensus Estimate for revenues indicates growth of 7.6%. The consensus estimate for earnings per share stands at $1.32.
Analysts believe that the rise in the adoption of artificial intelligence (AI) applications could boost Oracle's cloud infrastructure business because the advances made in its networking technology are more suited to take on AI workloads.
ETFs in Focus
Let’s delve into each ETF below:
iShares Expanded Tech-Software Sector ETF (IGV)
iShares Expanded Tech-Software Sector ETF provides exposure to software companies in the technology and communication services sectors by tracking the S&P North American Expanded Technology Software Index. The fund holds a basket of 116 securities, with Oracle taking the second spot at 8.8% of the total assets (read: Software Stocks & ETFs: The Next Big AI Opportunity?).
iShares Expanded Tech-Software Sector ETF is popular with an AUM of $6.7 billion. Volume is good as it exchanges 826,000 shares a day. IGV charges 41 bps in annual fees and has a Zacks ETF Rank #1 (Strong Buy) with a High risk outlook.
Qraft AI-Enhanced U.S. Large Cap Momentum ETF (AMOM - Free Report)
Qraft AI-Enhanced U.S. Large Cap Momentum ETF is an actively managed exchange-traded fund that seeks capital appreciation by investing in stocks that exhibit higher price momentum. It holds 50 stocks in its basket, with Oracle occupying the second spot at 7.5%. Consumer cyclicals is the top sector with a 40% allocation, followed by technology, industrials and consumer non-cyclicals.
Qraft AI-Enhanced U.S. Large Cap Momentum ETF has accumulated $13.1 million in its asset base while trading in a volume of 3,000 shares a day on average. It charges 75 bps in annual fees.
Fidelity Cloud Computing ETF (FCLD - Free Report)
Fidelity Cloud Computing ETF follows the Fidelity Cloud Computing Index, which reflects the performance of a global universe of companies across the market capitalization spectrum that provide products or services enabling the increased adoption of cloud computing, characterized by the delivery of computing services over the internet. It holds 59 stocks in its basket with Oracle accounting for 4.8% share.
Fidelity Cloud Computing ETF has managed assets worth $43.2 million and charges 39 bps in fees per year. It trades in a volume of 18,000 shares a day on average.
iShares U.S. Tech Independence Focused ETF (IETC - Free Report)
iShares U.S. Tech Independence Focused ETF is an actively managed ETF providing exposure to U.S. companies with a focus on the country’s tech independence. It holds 163 stocks in its basket, with Oracle occupying the seventh position at 4.6% of assets.
iShares U.S. Tech Independence Focused ETF has accumulated $158.4 million in its asset base and trades in a light volume of 12,000 shares. It charges 18 bps in annual fees (read: Time for Low-P/E Tech ETFs?).
First Trust NASDAQ Technology Dividend Index Fund (TDIV - Free Report)
First Trust NASDAQ Technology Dividend Index Fund provides exposure to dividend payers in the technology sector by tracking the Nasdaq Technology Dividend Index. TDIV holds about 91 securities in its basket. Of these firms, ORCL occupies the sixth position, making up 4.5% of the assets.
First Trust NASDAQ Technology Dividend Index Fund has $2 billion in its asset base and trades in a moderate volume of about 91,000 shares per day. The ETF charges 50 bps in annual fees.
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 >>