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After the closing bell on Tuesday, Google parent Alphabet (GOOGL - Free Report) reported solid first-quarter 2023 results, topping both revenue and earnings estimates. The result followed two quarters of earnings disappointment.
As such, shares of GOOGL jumped as much as 5% in after-market trading on an elevated volume. Investors should tap the strength with ETFs with a substantial allocation to Alphabet. These include Communication Services Select Sector SPDR Fund (XLC - Free Report) , Vanguard Communication Services ETF (VOX - Free Report) , Fidelity MSCI Communication Services Index ETF (FCOM - Free Report) , iShares Global Comm Services ETF (IXP - Free Report) and MicroSectors FANG+ ETN (FNGS - Free Report) .
Earnings in Focus
Earnings per share came in at 1.17, easily outpacing the Zacks Consensus Estimate of $1.06 but declining from $1.23 in the year-ago quarter. Revenues grew 3% year over year to $69.8 billion (including traffic acquisition costs (TAC) which the company does not calculate in its headline).
Excluding TAC, the company reported revenues of $58.1 billion, well above the consensus estimate of $57.2 billion. Google’s search business returned to growth, with revenues rising 2% in the quarter. However, revenues from Google advertising declined slightly to $54.5 billion from $54.7 billion a year ago while YouTube division saw revenues of $6.7 million, down from $6.9 million in the year-ago quarter (see: all the Communication ETFs here).
The company is at the center of the industry's AI competition after the popularity of AI-based chatbot ChatGPT, launched late last year by Microsoft (MSFT - Free Report) .
ETFs in Focus
Communication Services Select Sector SPDR Fund (XLC - Free Report)
Communication Services Select Sector SPDR Fund offers exposure to companies from telecommunication services, media, entertainment and interactive media & services, and has accumulated $10.9 billion in its asset base. It follows the Communication Services Select Sector Index and holds 24 stocks in its basket, with Alphabet Class A and C shares occupying the second and third position, respectively, with a combined 24.2% share. About 47.5% of the portfolio is allocated to interactive media & services, while entertainment and media round off the next two (read: 5 ETFs Sizzle Last Week Amid Volatility).
Communication Services Select Sector SPDR Fund charges 10 bps in annual fees and trades in an average daily volume of 7 million shares. It has a Zacks ETF Rank #2 (Buy).
Vanguard Communication Services ETF targets the communication sector by tracking the MSCI US Investable Market Communication Services 25/50 Index. Holding 115 stocks in its basket, both Alphabet Class A and C shares take the second and third spots, with a total of 23.6% of the portfolio. Interactive media & services is the top sector, accounting for 44.3% of the portfolio, while movies & entertainment, cable & satellite, and integrated telecommunication services round off the next three.
Vanguard Communication Services ETF has AUM of $2.7 billion and trades in a good volume of 180,000 shares a day, on average. It charges 10 bps in annual fees and has a Zacks ETF Rank #3 (Hold) with a Medium risk outlook.
Fidelity MSCI Communication Services Index ETF (FCOM - Free Report)
Fidelity MSCI Communication Services Index ETF follows the MSCI USA IMI Communication Services 25/50 Index. It holds 111 stocks in its basket, with Alphabet both Class A and C shares occupying the second and third positions at a combined 23.7% (read: 5 Best Performing Sector ETFs of Q1).
Fidelity MSCI Communication Services Index ETF has amassed $580 million in its asset base and trades in an average daily volume of 97,000 shares. It charges 8 bps in annual fees and has a Zacks ETF Rank #2 with a Medium risk outlook.
iShares Global Comm Services ETF provides global exposure to companies in media, entertainment, social media, search engine, video/gaming and telecommunication services by tracking the S&P Global 1200 Communication Services 4.5/22.5/45 Capped Index. It holds 69 stocks in its basket, with Alphabet Class A and C shares taking the second and third spot at 23.8%. Interactive media & services dominates the fund’s return at 47.5%, followed by integrated telecommunication services (19.4%).
iShares Global Comm Services ETF has amassed $267.3 million in its asset base while trading at an average daily volume of 19,000 shares. The expense ratio comes in at 0.40%. IXP has a Zacks ETF Rank #3 with a Medium risk outlook.
MicroSectors FANG+ ETN is linked to the performance of the NYSE FANG+ Index, which is equal-dollar weighted, designed to provide exposure to a group of highly traded growth stocks of next-generation technology and tech-enabled companies. It holds 10 equal-weighted stocks in its basket, with Alphabet accounting for a 10.3% share.
MicroSectors FANG+ ETN has accumulated $61.9 million in its asset base and charges 58 bps in annual fees. It trades in an average daily volume of 55,000 shares and has a Zacks ETF Rank #3.
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ETFs Set to Gain on Alphabet's Q1 Earnings Beat
After the closing bell on Tuesday, Google parent Alphabet (GOOGL - Free Report) reported solid first-quarter 2023 results, topping both revenue and earnings estimates. The result followed two quarters of earnings disappointment.
As such, shares of GOOGL jumped as much as 5% in after-market trading on an elevated volume. Investors should tap the strength with ETFs with a substantial allocation to Alphabet. These include Communication Services Select Sector SPDR Fund (XLC - Free Report) , Vanguard Communication Services ETF (VOX - Free Report) , Fidelity MSCI Communication Services Index ETF (FCOM - Free Report) , iShares Global Comm Services ETF (IXP - Free Report) and MicroSectors FANG+ ETN (FNGS - Free Report) .
Earnings in Focus
Earnings per share came in at 1.17, easily outpacing the Zacks Consensus Estimate of $1.06 but declining from $1.23 in the year-ago quarter. Revenues grew 3% year over year to $69.8 billion (including traffic acquisition costs (TAC) which the company does not calculate in its headline).
Excluding TAC, the company reported revenues of $58.1 billion, well above the consensus estimate of $57.2 billion. Google’s search business returned to growth, with revenues rising 2% in the quarter. However, revenues from Google advertising declined slightly to $54.5 billion from $54.7 billion a year ago while YouTube division saw revenues of $6.7 million, down from $6.9 million in the year-ago quarter (see: all the Communication ETFs here).
The company is at the center of the industry's AI competition after the popularity of AI-based chatbot ChatGPT, launched late last year by Microsoft (MSFT - Free Report) .
ETFs in Focus
Communication Services Select Sector SPDR Fund (XLC - Free Report)
Communication Services Select Sector SPDR Fund offers exposure to companies from telecommunication services, media, entertainment and interactive media & services, and has accumulated $10.9 billion in its asset base. It follows the Communication Services Select Sector Index and holds 24 stocks in its basket, with Alphabet Class A and C shares occupying the second and third position, respectively, with a combined 24.2% share. About 47.5% of the portfolio is allocated to interactive media & services, while entertainment and media round off the next two (read: 5 ETFs Sizzle Last Week Amid Volatility).
Communication Services Select Sector SPDR Fund charges 10 bps in annual fees and trades in an average daily volume of 7 million shares. It has a Zacks ETF Rank #2 (Buy).
Vanguard Communication Services ETF (VOX - Free Report)
Vanguard Communication Services ETF targets the communication sector by tracking the MSCI US Investable Market Communication Services 25/50 Index. Holding 115 stocks in its basket, both Alphabet Class A and C shares take the second and third spots, with a total of 23.6% of the portfolio. Interactive media & services is the top sector, accounting for 44.3% of the portfolio, while movies & entertainment, cable & satellite, and integrated telecommunication services round off the next three.
Vanguard Communication Services ETF has AUM of $2.7 billion and trades in a good volume of 180,000 shares a day, on average. It charges 10 bps in annual fees and has a Zacks ETF Rank #3 (Hold) with a Medium risk outlook.
Fidelity MSCI Communication Services Index ETF (FCOM - Free Report)
Fidelity MSCI Communication Services Index ETF follows the MSCI USA IMI Communication Services 25/50 Index. It holds 111 stocks in its basket, with Alphabet both Class A and C shares occupying the second and third positions at a combined 23.7% (read: 5 Best Performing Sector ETFs of Q1).
Fidelity MSCI Communication Services Index ETF has amassed $580 million in its asset base and trades in an average daily volume of 97,000 shares. It charges 8 bps in annual fees and has a Zacks ETF Rank #2 with a Medium risk outlook.
iShares Global Comm Services ETF (IXP - Free Report)
iShares Global Comm Services ETF provides global exposure to companies in media, entertainment, social media, search engine, video/gaming and telecommunication services by tracking the S&P Global 1200 Communication Services 4.5/22.5/45 Capped Index. It holds 69 stocks in its basket, with Alphabet Class A and C shares taking the second and third spot at 23.8%. Interactive media & services dominates the fund’s return at 47.5%, followed by integrated telecommunication services (19.4%).
iShares Global Comm Services ETF has amassed $267.3 million in its asset base while trading at an average daily volume of 19,000 shares. The expense ratio comes in at 0.40%. IXP has a Zacks ETF Rank #3 with a Medium risk outlook.
MicroSectors FANG+ ETN (FNGS - Free Report)
MicroSectors FANG+ ETN is linked to the performance of the NYSE FANG+ Index, which is equal-dollar weighted, designed to provide exposure to a group of highly traded growth stocks of next-generation technology and tech-enabled companies. It holds 10 equal-weighted stocks in its basket, with Alphabet accounting for a 10.3% share.
MicroSectors FANG+ ETN has accumulated $61.9 million in its asset base and charges 58 bps in annual fees. It trades in an average daily volume of 55,000 shares and has a Zacks ETF Rank #3.