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Amazon Posts Biggest Profit Ever With a Huge Beat: ETFs to Tap
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After the closing bell on Thursday, Amazon (AMZN - Free Report) posted blockbuster results for Q1. The company has reported its biggest profit ever, benefiting from the accelerated adoption of e-commerce driven by video streaming, remote working and online shopping.
Earnings per share came in at $15.79, easily surpassing the Zacks Consensus Estimate of $9.75 and more than tripled the year-ago earnings of $5.01. Revenues climbed 44% year over year to $108.5 billion and edged past the consensus estimate of $105.2 billion. The company has topped $100 billion in revenues for the second consecutive quarter.
In particular, revenues from the cloud computing business — Amazon Web Services (AWS) — surged 32% year over year to $13.5 billion. AWS, which turned 15 years old, has become a $54 billion annual sales run rate business. Prime Video has turned 10 with more than 175 million Prime members streaming shows and movies, and streaming hours are up more than 70% year over year (read: A Comprehensive Guide to Cloud Computing ETFs).
Amazon has been making the most of higher demand for online consumer staples and are likely to do so post-pandemic, particularly for groceries. It entered 2021 with plenty of big growth opportunities, including plans to expand its virtual health care program across the United States. The company is also expanding its prescription drug business and remains the clear leader in cloud computing services.
The e-commerce giant offered an upbeat revenue guidance of $110-$116 billion, suggesting 24-30% year-over-year growth for the second quarter. The growth will be partly driven by Prime Day, the company's annual marketing blitz, expected to be held in June rather than July. The low-end of the range is above the current Zacks Consensus Estimate of $108.03 billion, which indicates 21.5% growth.
Market Impact
Following the strong results, AMZN shares popped 5% in aftermarket hours to all-time highs 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 25.4% of the portfolio. The product has amassed $1.2 billion in its asset base and currently trades in a moderate volume of around 113,000 shares a day on average. It charges 58 bps in annual fees from investors.
Fidelity MSCI Consumer Discretionary Index ETF (FDIS - Free Report)
This fund tracks the MSCI USA IMI Consumer Discretionary Index, holding 275 stocks in its basket. Of these, AMZN takes the top spot with 21.3% share. Internet & direct marketing retail makes up for the top sector with 25.3% share followed by specialty retail (20.3%), and hotels, restaurants & leisure (18.1%). The product has amassed $1.6 billion in its asset base while trading in a good volume of around 185,000 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 $20.6 billion and an average daily volume of around 4.4 million shares. Holding 63 securities in its basket, Amazon takes the top spot with 24.1% of assets. Internet & direct marketing retail dominates about 25.8% of the portfolio, while specialty retail, hotels restaurants and leisure and automobiles 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 (read: ETFs to Buy on Tesla's Blowout Q1 Earnings).
This fund currently follows the MSCI US Investable Market Consumer Discretionary 25/50 Index and holds 298 stocks in its basket. Of these, Amazon occupies the top position with 21.3% allocation. Internet & direct marketing retail takes the largest share at 27.9% 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 132,000 shares a day. The product has managed about $6.1 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 19.2% share. The product has amassed $245 million in its asset base and charges 35 bps in annual fees. Volume is light as it exchanges nearly 34,000 shares per day. RTH has a Zacks ETF Rank #2 with a Medium risk outlook (read: March Retail Sales Sparkles: Industry ETFs & Stocks to Win).
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Amazon Posts Biggest Profit Ever With a Huge Beat: ETFs to Tap
After the closing bell on Thursday, Amazon (AMZN - Free Report) posted blockbuster results for Q1. The company has reported its biggest profit ever, benefiting from the accelerated adoption of e-commerce driven by video streaming, remote working and online shopping.
Earnings per share came in at $15.79, easily surpassing the Zacks Consensus Estimate of $9.75 and more than tripled the year-ago earnings of $5.01. Revenues climbed 44% year over year to $108.5 billion and edged past the consensus estimate of $105.2 billion. The company has topped $100 billion in revenues for the second consecutive quarter.
In particular, revenues from the cloud computing business — Amazon Web Services (AWS) — surged 32% year over year to $13.5 billion. AWS, which turned 15 years old, has become a $54 billion annual sales run rate business. Prime Video has turned 10 with more than 175 million Prime members streaming shows and movies, and streaming hours are up more than 70% year over year (read: A Comprehensive Guide to Cloud Computing ETFs).
Amazon has been making the most of higher demand for online consumer staples and are likely to do so post-pandemic, particularly for groceries. It entered 2021 with plenty of big growth opportunities, including plans to expand its virtual health care program across the United States. The company is also expanding its prescription drug business and remains the clear leader in cloud computing services.
The e-commerce giant offered an upbeat revenue guidance of $110-$116 billion, suggesting 24-30% year-over-year growth for the second quarter. The growth will be partly driven by Prime Day, the company's annual marketing blitz, expected to be held in June rather than July. The low-end of the range is above the current Zacks Consensus Estimate of $108.03 billion, which indicates 21.5% growth.
Market Impact
Following the strong results, AMZN shares popped 5% in aftermarket hours to all-time highs 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 25.4% of the portfolio. The product has amassed $1.2 billion in its asset base and currently trades in a moderate volume of around 113,000 shares a day on average. It charges 58 bps in annual fees from investors.
Fidelity MSCI Consumer Discretionary Index ETF (FDIS - Free Report)
This fund tracks the MSCI USA IMI Consumer Discretionary Index, holding 275 stocks in its basket. Of these, AMZN takes the top spot with 21.3% share. Internet & direct marketing retail makes up for the top sector with 25.3% share followed by specialty retail (20.3%), and hotels, restaurants & leisure (18.1%). The product has amassed $1.6 billion in its asset base while trading in a good volume of around 185,000 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 $20.6 billion and an average daily volume of around 4.4 million shares. Holding 63 securities in its basket, Amazon takes the top spot with 24.1% of assets. Internet & direct marketing retail dominates about 25.8% of the portfolio, while specialty retail, hotels restaurants and leisure and automobiles 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 (read: ETFs to Buy on Tesla's Blowout Q1 Earnings).
Vanguard Consumer Discretionary ETF (VCR - Free Report)
This fund currently follows the MSCI US Investable Market Consumer Discretionary 25/50 Index and holds 298 stocks in its basket. Of these, Amazon occupies the top position with 21.3% allocation. Internet & direct marketing retail takes the largest share at 27.9% 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 132,000 shares a day. The product has managed about $6.1 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 19.2% share. The product has amassed $245 million in its asset base and charges 35 bps in annual fees. Volume is light as it exchanges nearly 34,000 shares per day. RTH has a Zacks ETF Rank #2 with a Medium risk outlook (read: March Retail Sales Sparkles: Industry ETFs & Stocks to Win).
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 >>