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Leveraged Tech ETFs to Cash in on Upbeat Big Tech Earnings
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The broader market was edgy as investors waited with bated breath for big tech earnings releases. However, the tech-heavy Nasdaq led the equity gauges to log decent gains after hours on Apr 25, as upbeat earnings from tech giants Alphabet Inc. (GOOG - Free Report) and Microsoft Corporation (MSFT - Free Report) boosted investors’ confidence.
Alphabet added about 1.5% post earnings release, while Microsoft jumped 8.5%. Meta Platforms Inc. (META - Free Report) , which is scheduled to report today, also added more than 2% in afterhours on Apr 25, taking cues from Google and Microsoft’s success.
Microsoft has reported fiscal Q3 results with typical beats on both top and bottom lines. Earnings of $2.45 per share is notably above the Zacks Consensus Estimate and the year-ago reported figure of $2.22, while revenues of $52.86 billion surpassed the estimate of $50.95 billion. The software giant missed on earnings only once in the past five years.
The Azure revenue growth came roughly in line with expectations at 27% (though this points to a notable deceleration within the company’s cloud-based business overall). Microsoft was in the news during the quarter for its consistent release of new products and features that incorporated OpenAI's NLP technologies, such as GPT-4. These integrations spanned various services, including Microsoft 365, Bing, Dynamics, GitHub, and security.
The global PC shipment slowdown is playing a spoilsport. With a 28% decline in Windows OEM revenues (from PC manufacturers paying Microsoft to put Windows on their devices) and a 30% downfall in Devices, which includes Surface tablets and computers. Xbox hardware revenues fell 30%.
Google parent Alphabet also outperformed expectations on both earnings and sales in its Q1 report after the close. Earnings of $1.17 per share breezed past the $1.06 analysts were looking for. Still, the reported earnings fail to reach to the level of $1.23 per share the company reported a year ago. Revenues, subtracting traffic acquisition costs (TAC), came in at $58.07 billion for the quarter, better than the $57.20 billion expected (GOOGL reported $69.8 billion, without TAC removed).
In its first profitable quarter in its cloud space, revenues came in at slightly shy of estimates. The segment reported $7.45 billion in revenues versus $7.49 billion expected. YouTube was slightly stronger than expected in the quarter, $6.7 billion versus the $6.6 billion estimated. The company also announced a massive $70 billion share buyback.
ETF Investment Strategy
Against this backdrop, we highlight a few leveraged tech ETFs or tech-heavy Nasdaq ETFs that could fetch you smart gains. Investors should note that these leveraged products are extremely volatile and suitable only for short-term traders. Additionally, the daily rebalancing — when combined with leverage — may make these products deviate significantly from the expected long-term performance figures.
ProShares UltraPro QQQ (TQQQ - Free Report) – Up 3.5% afterhours on Apr 25
Direxion Daily Technology Bull 3X Shares (TECL - Free Report) – Up 6% afterhours on Apr 25
MicroSectors FANG+ Index 3X Leveraged ETN (FNGU - Free Report) – Up 8.3% afterhours on Apr 25
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Leveraged Tech ETFs to Cash in on Upbeat Big Tech Earnings
The broader market was edgy as investors waited with bated breath for big tech earnings releases. However, the tech-heavy Nasdaq led the equity gauges to log decent gains after hours on Apr 25, as upbeat earnings from tech giants Alphabet Inc. (GOOG - Free Report) and Microsoft Corporation (MSFT - Free Report) boosted investors’ confidence.
Alphabet added about 1.5% post earnings release, while Microsoft jumped 8.5%. Meta Platforms Inc. (META - Free Report) , which is scheduled to report today, also added more than 2% in afterhours on Apr 25, taking cues from Google and Microsoft’s success.
Microsoft has reported fiscal Q3 results with typical beats on both top and bottom lines. Earnings of $2.45 per share is notably above the Zacks Consensus Estimate and the year-ago reported figure of $2.22, while revenues of $52.86 billion surpassed the estimate of $50.95 billion. The software giant missed on earnings only once in the past five years.
The Azure revenue growth came roughly in line with expectations at 27% (though this points to a notable deceleration within the company’s cloud-based business overall). Microsoft was in the news during the quarter for its consistent release of new products and features that incorporated OpenAI's NLP technologies, such as GPT-4. These integrations spanned various services, including Microsoft 365, Bing, Dynamics, GitHub, and security.
The global PC shipment slowdown is playing a spoilsport. With a 28% decline in Windows OEM revenues (from PC manufacturers paying Microsoft to put Windows on their devices) and a 30% downfall in Devices, which includes Surface tablets and computers. Xbox hardware revenues fell 30%.
Google parent Alphabet also outperformed expectations on both earnings and sales in its Q1 report after the close. Earnings of $1.17 per share breezed past the $1.06 analysts were looking for. Still, the reported earnings fail to reach to the level of $1.23 per share the company reported a year ago. Revenues, subtracting traffic acquisition costs (TAC), came in at $58.07 billion for the quarter, better than the $57.20 billion expected (GOOGL reported $69.8 billion, without TAC removed).
In its first profitable quarter in its cloud space, revenues came in at slightly shy of estimates. The segment reported $7.45 billion in revenues versus $7.49 billion expected. YouTube was slightly stronger than expected in the quarter, $6.7 billion versus the $6.6 billion estimated. The company also announced a massive $70 billion share buyback.
ETF Investment Strategy
Against this backdrop, we highlight a few leveraged tech ETFs or tech-heavy Nasdaq ETFs that could fetch you smart gains. Investors should note that these leveraged products are extremely volatile and suitable only for short-term traders. Additionally, the daily rebalancing — when combined with leverage — may make these products deviate significantly from the expected long-term performance figures.
ProShares UltraPro QQQ (TQQQ - Free Report) – Up 3.5% afterhours on Apr 25
Direxion Daily Technology Bull 3X Shares (TECL - Free Report) – Up 6% afterhours on Apr 25
MicroSectors FANG+ Index 3X Leveraged ETN (FNGU - Free Report) – Up 8.3% afterhours on Apr 25