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Alphabet Heavy ETFs in Focus After Upbeat Q2 Earnings
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Alphabet (GOOGL - Free Report) came up with better-than-expected second-quarter earnings on Jul 25 after market close. Earnings of $1.44 per share, surpassed the Zacks Consensus Estimate of $1.32. This marks an improvement from earnings of $1.21 per share recorded in the same period last year. It's worth noting that these figures have been adjusted to account for non-recurring items. Shares surged 6.1% in after hours.
Snapshot of Q2 Earnings
Alphabet, which belongs to the Zacks Internet - Services industry, posted revenues of $62.07 billion for the quarter ended June 2023, surpassing the Zacks Consensus Estimate by 3.03%. This compares to year-ago revenues of $57.47 billion.
Alphabet shares have added about 37.7% since the beginning of the year versus the S&P 500's gain of 18.6%.
Results Fueled by Cloud Expansion and Ad Revenues
According to Reuters, Alphabet's performance was bolstered by a consistent surge in demand for its cloud services, coupled with a resurgence in advertising activities. Advertisers, comprising a significant portion of Alphabet's revenues, have become cautious in allocating their funds to unproven platforms. As a result, they have redirected their spending back to Alphabet's offerings.
Per CNBC, Google's cloud division, encompassing infrastructure and productivity applications, witnessed a remarkable 28% surge in revenue. The division achieved a significant milestone by turning profitable on an operating basis during the first quarter, and in the second quarter, it reported an impressive operating income of $395 million. This marks a substantial turnaround compared to a loss of $590 million recorded in the same period the previous year.
ETFs in Focus
The earnings results might have a huge impact on ETFs heavily invested in this Internet giant. Here we have highlighted four ETFs with double digit exposure to Alphabet.
Vanguard Communication Services ETF seeks to track the performance of the MSCI US Investable Market Communication Services 25/50 Index with a basket of 119 securities. The fund has amassed an asset base of $3.28 billion and charges an annual fee of 0.10%.
Vanguard Communication Services ETF has an exposure of 12.12% in GOOGL and a Zacks ETF Rank #3 (Hold), along with a Medium risk outlook. The fund has gained 31.59% year to date and 12.83% over the past year (as of Jul 25).
Communication Services Select Sector SPDR Fund (XLC - Free Report)
Communication Services Select Sector SPDR Fund tracks the performance of the Communication Services Select Sector Index. The fund has gathered an asset base of $13.82 billion and has a basket of 23 securities. XLC charges an annual fee of 0.10%.
Communication Services Select Sector SPDR Fund has an exposure of 11.82% to GOOGL and a Zacks ETF Rank #2 (Buy). The fund has earned 37.46% year to date and 18.36% over the past year (as of Jul 25).
iShares Global Comm Services ETF seeks to track the performance of the S&P Global 1200Communication Services 4.5/22.5/45 Capped Index with a basket of 68 securities. The fund has command over an asset base of $285.06 million and charges an annual fee of 0.40%.
iShares Global Comm Services ETF has an exposure of 11.62% in GOOGL. The fund has a Zacks ETF Rank #3 with a Medium risk outlook. IXP has earned 27.58% year to date and 13.58% over the past year (as of Jul 25).
Fidelity MSCI Communication Services Index ETF (FCOM - Free Report)
Fidelity MSCI Communication Services Index ETF closely tracks the performance of the MSCI USA IMI Communication Services 25/50 Index with a basket of 111 securities. The fund has an asset base of $755.91 million and charges an annual fee of 0.08%.
Fidelity MSCI Communication Services Index ETF has an exposure of 11.39% in GOOGL and a Zacks ETF Rank #2 along with a Medium risk outlook. The fund has gained 31.71% year to date and 12.57% over the past year (as of Jul 25).
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Alphabet Heavy ETFs in Focus After Upbeat Q2 Earnings
Alphabet (GOOGL - Free Report) came up with better-than-expected second-quarter earnings on Jul 25 after market close. Earnings of $1.44 per share, surpassed the Zacks Consensus Estimate of $1.32. This marks an improvement from earnings of $1.21 per share recorded in the same period last year. It's worth noting that these figures have been adjusted to account for non-recurring items. Shares surged 6.1% in after hours.
Snapshot of Q2 Earnings
Alphabet, which belongs to the Zacks Internet - Services industry, posted revenues of $62.07 billion for the quarter ended June 2023, surpassing the Zacks Consensus Estimate by 3.03%. This compares to year-ago revenues of $57.47 billion.
Alphabet shares have added about 37.7% since the beginning of the year versus the S&P 500's gain of 18.6%.
Results Fueled by Cloud Expansion and Ad Revenues
According to Reuters, Alphabet's performance was bolstered by a consistent surge in demand for its cloud services, coupled with a resurgence in advertising activities. Advertisers, comprising a significant portion of Alphabet's revenues, have become cautious in allocating their funds to unproven platforms. As a result, they have redirected their spending back to Alphabet's offerings.
Per CNBC, Google's cloud division, encompassing infrastructure and productivity applications, witnessed a remarkable 28% surge in revenue. The division achieved a significant milestone by turning profitable on an operating basis during the first quarter, and in the second quarter, it reported an impressive operating income of $395 million. This marks a substantial turnaround compared to a loss of $590 million recorded in the same period the previous year.
ETFs in Focus
The earnings results might have a huge impact on ETFs heavily invested in this Internet giant. Here we have highlighted four ETFs with double digit exposure to Alphabet.
Vanguard Communication Services ETF (VOX - Free Report)
Vanguard Communication Services ETF seeks to track the performance of the MSCI US Investable Market Communication Services 25/50 Index with a basket of 119 securities. The fund has amassed an asset base of $3.28 billion and charges an annual fee of 0.10%.
Vanguard Communication Services ETF has an exposure of 12.12% in GOOGL and a Zacks ETF Rank #3 (Hold), along with a Medium risk outlook. The fund has gained 31.59% year to date and 12.83% over the past year (as of Jul 25).
Communication Services Select Sector SPDR Fund (XLC - Free Report)
Communication Services Select Sector SPDR Fund tracks the performance of the Communication Services Select Sector Index. The fund has gathered an asset base of $13.82 billion and has a basket of 23 securities. XLC charges an annual fee of 0.10%.
Communication Services Select Sector SPDR Fund has an exposure of 11.82% to GOOGL and a Zacks ETF Rank #2 (Buy). The fund has earned 37.46% year to date and 18.36% over the past year (as of Jul 25).
iShares Global Comm Services ETF (IXP - Free Report)
iShares Global Comm Services ETF seeks to track the performance of the S&P Global 1200Communication Services 4.5/22.5/45 Capped Index with a basket of 68 securities. The fund has command over an asset base of $285.06 million and charges an annual fee of 0.40%.
iShares Global Comm Services ETF has an exposure of 11.62% in GOOGL. The fund has a Zacks ETF Rank #3 with a Medium risk outlook. IXP has earned 27.58% year to date and 13.58% over the past year (as of Jul 25).
Fidelity MSCI Communication Services Index ETF (FCOM - Free Report)
Fidelity MSCI Communication Services Index ETF closely tracks the performance of the MSCI USA IMI Communication Services 25/50 Index with a basket of 111 securities. The fund has an asset base of $755.91 million and charges an annual fee of 0.08%.
Fidelity MSCI Communication Services Index ETF has an exposure of 11.39% in GOOGL and a Zacks ETF Rank #2 along with a Medium risk outlook. The fund has gained 31.71% year to date and 12.57% over the past year (as of Jul 25).