Shares of Google’s parent company Alphabet Inc. (GOOGL - Free Report) surged almost 4.1% after hours on Thursday after the company came up with upbeat Q2 earnings results. The market had probably sensed the strong momentum in the Google holding company as the stock had added about 0.5% in the trading session of July 28.
The stock performed remarkably well following its astounding second-quarter release. Alphabet briefly crossed a record high of $810.35/share in the after-market trading post earnings announcement.
Alphabet Earnings in Details
Alphabet reported adjusted earnings of $7.00 per share during the quarter, beating the Zacks Consensus Estimate of $6.47. Adjusted revenues of $17.5 billion were much above the Zacks Consensus Estimate was $16.9 billion.
This is the company’s third quarterly update since it undertook a major restructuring initiative last year. The company reported Google as a single segment while all other Alphabet businesses were combined as Other Bets. Google revenues were up 21% year over year, benefiting from higher revenues from Google websites (up 24%), Google Network Members' websites (up 3%) and Google advertising revenues (up 19%). Total traffic acquisition costs were almost $4 billion, accounting for 21% of total advertising revenue.
Cost per click (CPC) was down 2% year over year. Paid clicks were up 7% year over year. Other Bets revenues –primarily generated by Nest, Fiber and Verily – more than doubled to $185 million.
Despite stiff competition from Facebook (FB - Free Report) and Yahoo , the world’s largest Internet company, Alphabet, continues to enjoy a lot of investor attention. Alphabet benefited from increased use of Mobile Search by consumers, thanks to ongoing efforts to enhance the Mobile Search experience. The company also witnessed strong Desktop and Tablet Search and YouTube and programmatic advertising (read: 4 ETFs to Ride on Facebook's Spectacular Results).
Alphabet currently has a decent Zacks Rank #3 (Hold). Given the bullish outlook and the impressive run-up in Alphabet share prices, we have highlighted four ETFs with heavy exposure to this giant for investors seeking to bet on the stock along with its broader industry at this time (see: all the Technology ETFs here).
iShares U.S. Technology ETF (IYW - Free Report)
This ETF tracks the Dow Jones U.S. Technology Index, giving investors exposure to the broad technology space. The fund holds 140 stocks in its basket with AUM of $2.5 billion while charging 44 bps in fees and expenses. It exchanges more than 242,000 shares a day.
Of the major holdings, GOOGL has a weight of 6.1%. The product is heavily skewed toward the software & services segment, accounting for 54.2% of the holdings. The product has a Zacks ETF Rank of 1 or ‘Strong Buy’ with a Medium risk outlook.
Social Media Index ETF (SOCL - Free Report)
This fund provides a broad exposure to Social Media companies around the world by tracking the Solactive Social Media Total Return Index. The fund has accumulated AUM of $66.3 million while charging 65 bps in fees per year. The company trades in daily average volume of 28,000 shares.
In total, the fund holds 31 stocks in its basket. Out of these, Alphabet takes the seventh spot at 4.8%. The product has a Zacks ETF Rank of 2 or ‘Buy’ with a High risk outlook (read: 3 Tech ETFs to Buy on Apple's Impressive Q3 Earnings Results).
John Hancock Multifactor Technology ETF (JHMT - Free Report)
This fund provides a broad exposure to the technology sector within the U.S. by tracking the John Hancock Dimensional Technology Index. The fund has accumulated AUM of $20.2 million while charging 50 bps in fees per year. Volume is light though.
In total, the fund holds 120 stocks in its basket. Out of these, Alphabet takes the third spot at 5%. In terms of industrial exposure, Software makes up for almost 25% share in the basket.
Technology Select Sector SPDR Fund (XLK - Free Report)
This technology ETF follows the Technology Select Sector Index and has $12.5 billion in AUM. This fund trades in heavy volume of roughly 10.6 million shares and charges 14 bps in fees per year from investors. In total, the fund holds about 75 securities in its basket. Of these firms, Alphabet is among the top five, making up roughly 5.1% of the assets. The ETF currently has a Zacks ETF Rank of 1 with a Medium risk outlook (read: Forget Big Tech, Focus on These ETFs Instead).
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