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SNAP Skyrockets Post Q2 Earnings: ETFs to Play

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Snap (SNAP - Free Report) , known for its mobile camera communication application Snapchat, saw its shares gain more than 23% in the key trading session on Jul 23 post Q2 earnings results. Investors were impressed with its strength of users and engagement. Its ads growth was also eye-catching.

The company reported second-quarter 2021 earnings of 10 cents per share, beating the Zacks Consensus Estimate of a loss of 2 cents per share. The company had reported adjusted loss of 9 cents per share in the year-ago quarter.

Revenues jumped 116.2% from the year-ago quarter to $982.1 million, surpassing the consensus mark by 17.1%. Snap’s second-quarter 2021 top-line growth benefited from increasing ARPU and user base growth. Daily active users (DAU) at the end of the reported quarter were 293 million. Snap added 55 million DAU on a year-over-year basis and 13 million, sequentially.

“SNAP’s ad revenue strength was broad-based across use cases (Stories, Discover, lenses and AR, etc) as performance-focused innovation like improved matching, dynamic product ads, and new AR lenses are leading to increased advertiser and spend per advertiser growth,” Morgan Stanley noted, as quoted on CNBC. Wells Fargo analysts also highlighted the company’s broad-based growth and engagement, the CNBC article went on to mention.

Snap said the company was not affected by Apple’s iOS 14.5 privacy changes as it had estimated that it would be. This was due to the mobile operating system update rolling out later than expected and iOS users being slow to update their devices. This has given the company more time with advertisers to navigate the transition, said Jeremi Gorman, Snap’s chief business officer, as quoted on the CNBC article.

Snap inked partnerships with The Walt Disney (DIS - Free Report) , Viber and Bumble (BMBL - Free Report) that will bring Camera and AR capabilities into their applications. The company announced Snap Kit integrations with Alphabet’s (GOOGL) YouTube and YouTube Music, allowing users to share YouTube videos to the Snapchat Camera.

ETFs in Focus

While tapping the Snap stock is an option to play this upturn, a basket approach is also a lucrative option as it minimizes company-specific risks. Snap’s presence in Simplify Volt Pop Culture Disruption ETF (VPOP - Free Report) (the stock takes about 19.65% of the fund, Global X Social Media ETF (SOCL - Free Report) (the stock has 8.29% weight in the fund), First Trust US Equity Opportunities ETF (FPX - Free Report) (the stock has about 6.58% weight in the fund) and  Franklin Exponential Data ETF (XDAT - Free Report) (the stock has about 4.90%) put these tech-related ETFs in great focus. Snap’s own stock performance will regulate these funds (see all technology ETFs here).