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After the closing bell on Jul 26, Facebook’s parent company Meta Platforms (META - Free Report) reported solid second-quarter 2023 results, wherein it outpaced revenue and earnings estimates. The company posted its first double-digit revenue growth since 2021, boosted by the artificial intelligence (AI) craze. Further, Meta Platforms issued upbeat revenue guidance for the current quarter.
META shares spiked as much as 7.5% in aftermarket hours on elevated volume. Investors should buy ETFs having a large allocation to this social media giant to tap the opportune moment. These include Communication Services Select Sector SPDR Fund (XLC - Free Report) , Fidelity MSCI Communication Services Index ETF (FCOM - Free Report) , Vanguard Communication Services ETF (VOX - Free Report) , iShares Global Comm Services ETF (IXP - Free Report) and MicroSectors FANG+ ETN (FNGS - Free Report) .
Earnings in Focus
Adjusted earnings per share came in at $2.98, topping the Zacks Consensus Estimate of $2.87 and increasing 16% from the year-ago quarter. Revenues grew 11% year over year to $32 billion and came above the estimated $30.9 billion. This marks the first double-digit revenue growth for the company since 2021 (read: Nasdaq-100 Rebalance: What ETF Investors Should Know).
Meta Platforms’ global daily active users increased 5% year over year to 2.06 billion. Monthly active users grew 3% year over year to 3.03 billion. The company stated that about 3.07 billion people used at least one of the Family of services (Facebook, WhatsApp, Instagram or Messenger) every day, on average, as of June.
The world’s largest social media platform expects to post revenues in the range of $32-$34.5 billion for the third quarter. The Zacks Consensus Estimate is pegged at $31.34 billion.
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 $13.8 billion in its asset base. It follows the Communication Services Select Sector Index and holds 23 stocks in its basket, with Meta Platforms occupying the top position at 24.5% share. About 48% of the portfolio is allocated to interactive media & services, while entertainment and media round off the next two (see: all the Communication ETFs here).
Communication Services Select Sector SPDR Fund charges 10 bps in annual fees and trades in an average daily volume of 6 million shares. It has a Zacks ETF Rank #2 (Buy).
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 110 stocks in its basket, with Meta Platforms occupying the top position at 18.9%.
Fidelity MSCI Communication Services Index ETF has amassed $755.8 million in its asset base and trades in an average daily volume of 91,000 shares. It charges 8 bps in annual fees and has a Zacks ETF Rank #2 with a Medium risk outlook.
Vanguard Communication Services ETF also targets the communication sector by tracking the MSCI US Investable Market Communication Services 25/50 Index. Holding 118 stocks in its basket, Meta Platform takes the top spot with an 18.9% share. Interactive media & services is the top sector, accounting for 45.7% of the portfolio, while movies & entertainment, cable & satellite, and integrated telecommunication services round off the next three.
Vanguard Communication Services ETF has AUM of $3.3 billion and trades in a good volume of 217,000 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 (read: Why Communication Services ETFs Surged in 2023).
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 68 stocks in its basket, with Meta Platforms taking the top spot at 17.2% share. Interactive media & services dominates the fund’s return at 49%, followed by integrated telecommunication services (17.5%).
iShares Global Comm Services ETF has amassed $286.5 million in its asset base while trading at an average daily volume of 10,000 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 an equal-dollar weighted index 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 Meta Platform accounting for a 10% share.
MicroSectors FANG+ ETN has accumulated $135 million in its asset base and charges 58 bps in annual fees. It trades in an average daily volume of 169,000 shares and has a Zacks ETF Rank #3.
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ETFs to Tap on Meta's Blowout Q2 Earnings
After the closing bell on Jul 26, Facebook’s parent company Meta Platforms (META - Free Report) reported solid second-quarter 2023 results, wherein it outpaced revenue and earnings estimates. The company posted its first double-digit revenue growth since 2021, boosted by the artificial intelligence (AI) craze. Further, Meta Platforms issued upbeat revenue guidance for the current quarter.
META shares spiked as much as 7.5% in aftermarket hours on elevated volume. Investors should buy ETFs having a large allocation to this social media giant to tap the opportune moment. These include Communication Services Select Sector SPDR Fund (XLC - Free Report) , Fidelity MSCI Communication Services Index ETF (FCOM - Free Report) , Vanguard Communication Services ETF (VOX - Free Report) , iShares Global Comm Services ETF (IXP - Free Report) and MicroSectors FANG+ ETN (FNGS - Free Report) .
Earnings in Focus
Adjusted earnings per share came in at $2.98, topping the Zacks Consensus Estimate of $2.87 and increasing 16% from the year-ago quarter. Revenues grew 11% year over year to $32 billion and came above the estimated $30.9 billion. This marks the first double-digit revenue growth for the company since 2021 (read: Nasdaq-100 Rebalance: What ETF Investors Should Know).
Meta Platforms’ global daily active users increased 5% year over year to 2.06 billion. Monthly active users grew 3% year over year to 3.03 billion. The company stated that about 3.07 billion people used at least one of the Family of services (Facebook, WhatsApp, Instagram or Messenger) every day, on average, as of June.
The world’s largest social media platform expects to post revenues in the range of $32-$34.5 billion for the third quarter. The Zacks Consensus Estimate is pegged at $31.34 billion.
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 $13.8 billion in its asset base. It follows the Communication Services Select Sector Index and holds 23 stocks in its basket, with Meta Platforms occupying the top position at 24.5% share. About 48% of the portfolio is allocated to interactive media & services, while entertainment and media round off the next two (see: all the Communication ETFs here).
Communication Services Select Sector SPDR Fund charges 10 bps in annual fees and trades in an average daily volume of 6 million shares. It has a Zacks ETF Rank #2 (Buy).
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 110 stocks in its basket, with Meta Platforms occupying the top position at 18.9%.
Fidelity MSCI Communication Services Index ETF has amassed $755.8 million in its asset base and trades in an average daily volume of 91,000 shares. It charges 8 bps in annual fees and has a Zacks ETF Rank #2 with a Medium risk outlook.
Vanguard Communication Services ETF (VOX - Free Report)
Vanguard Communication Services ETF also targets the communication sector by tracking the MSCI US Investable Market Communication Services 25/50 Index. Holding 118 stocks in its basket, Meta Platform takes the top spot with an 18.9% share. Interactive media & services is the top sector, accounting for 45.7% of the portfolio, while movies & entertainment, cable & satellite, and integrated telecommunication services round off the next three.
Vanguard Communication Services ETF has AUM of $3.3 billion and trades in a good volume of 217,000 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 (read: Why Communication Services ETFs Surged in 2023).
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 68 stocks in its basket, with Meta Platforms taking the top spot at 17.2% share. Interactive media & services dominates the fund’s return at 49%, followed by integrated telecommunication services (17.5%).
iShares Global Comm Services ETF has amassed $286.5 million in its asset base while trading at an average daily volume of 10,000 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 an equal-dollar weighted index 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 Meta Platform accounting for a 10% share.
MicroSectors FANG+ ETN has accumulated $135 million in its asset base and charges 58 bps in annual fees. It trades in an average daily volume of 169,000 shares and has a Zacks ETF Rank #3.