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ETFs to Watch as META Shares Tumble Despite Q1 Earnings Beat
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Key Takeaways
Meta shares fell nearly 7% post-earnings despite a beat on both counts.
Higher 2026 capex outlook and disappointing user metrics weighed on investor sentiment.
ETFs offer exposure to Meta, helping investors balance upside potential with reduced single-stock risk.
Shares of Meta Platforms (META - Free Report) fell nearly 7% in extended trading yesterday (as cited on CNBC), despite the company’s earnings beating first-quarter 2026 estimates. The company’s increased capital expenditure projection for 2026 and disappointing user numbers seem to have hurt investor sentiment in the extended trading session, which, in turn, caused its share price to tumble.
While this share pullback might encourage investors to see this as a golden opportunity to invest in the Facebook-owner, some might remain skeptical about the company’s increased focus on artificial intelligence investments, of late, which are yet to produce new revenue streams.
Nevertheless, the company’s strengthening advertising business, along with the significant gains from its content recommendation initiatives, continues to be a major growth driver in the near term.
Against this backdrop, investors who believe in Meta’s long-term trajectory, yet wish to avoid the idiosyncratic risk and sharp volatility of a single-stock position, may find a middle ground in exchange-traded funds (ETFs). By selecting funds that feature Meta Platforms as a top-10 holding, investors can capture the potential upside of a rebound while mitigating the impact of company-specific shocks on their overall portfolio.
However, to determine if this post-earnings pullback is a temporary stumble or a sign of deeper structural shifts, it is essential to look beyond the headline figures. Before exploring the best ETFs for Meta exposure, let us examine the firm’s first-quarter performance across other critical operational metrics.
A Brief Analysis of META’s Q1 Results
META’s adjusted earnings of $7.31 per share comfortably surpassed the Zacks Consensus Estimate by 8.9%, while revenues beat the consensus mark by 1.5%. On a year-over-year basis, both top and bottom lines improved in double digits.
The total number of ad impressions served across META’s services increased 19%, driven primarily by growth in engagement and users, as well as ad load optimizations.
On the other hand, the global average price per ad increased 12% year over year in the first quarter, as META benefited from ad performance improvements, better macro conditions and currency tailwinds in international regions.
On the operational front, Meta’s technical refinements continue to yield tangible results for advertisers. Enhancements to the Lattice modeling and learning techniques, coupled with advancements in the GEM model architecture, fueled a notable 6% increase in conversion rates for landing page view ads during the first quarter.
To support its long-term AI roadmap, Meta has secured significant cloud capacity and infrastructure agreements slated to go live throughout 2026 and 2027. These multi-year commitments drove a substantial $107 billion increase in the company’s contractual obligations during the reported quarter.
META remains committed to scaling its models across multiple dimensions, increasing both size and complexity. By further integrating Large Language Models (LLMs) to deepen content understanding, the company aims to enhance its recommendation engines, more precisely matching users with content and interests to drive higher engagement and ad relevance.
The company is expected to incur capital expenditures in the range of $125-$145 billion during 2026, reflecting an increase from the earlier range of $115-$135 billion. This increase reflects META’s expectations for higher component pricing in 2026 and, to a lesser extent, additional data center costs to support future year capacity.
This fund, with net assets worth $5.5 billion, offers exposure to 114 U.S. companies within the communication services sector. Of these, META carries the first spot, holding 20.58% of the fund.
VOX has rallied 32.6% over the past year. The fund charges 9 basis points (bps) as fees. It traded at a volume of 0.20 million shares in the last trading session.
This fund, with net assets worth $587.6 million, offers exposure to 66 companies that provide media, entertainment, social media, search engine, video/gaming, and telecommunication services. META holds the top spot, with 16.47% share in the fund.
IXP has surged 26.3% over the past year. The fund charges 40 bps as fees. It traded at a volume of 0.02 million shares in the last trading session.
Communication Services Select Sector SPDR ETF (XLC - Free Report)
This fund, with assets under management (AUM) worth $25.32 billion, offers exposure to 23 companies from the telecommunication services, media, entertainment and interactive media & services industries. Of these, META is at the top spot, holding 14.93% of the fund.
XLC has gained 21.7% over the past year. The fund charges 8 bps as fees. It traded at a good volume of 4.40 million shares in the last trading session.
Global X PureCap MSCI Communication Services ETF (GXPC - Free Report)
This fund, with net assets worth $72.4 million, offers exposure to 26 U.S. companies in the communication services sector. Of these, META is at the third spot, holding 21.74% of the fund.
GXPC has soared 25.9% over the past year. The fund charges 15 bps as fees. It traded at a volume of 0.09 million shares in the last trading session.
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ETFs to Watch as META Shares Tumble Despite Q1 Earnings Beat
Key Takeaways
Shares of Meta Platforms (META - Free Report) fell nearly 7% in extended trading yesterday (as cited on CNBC), despite the company’s earnings beating first-quarter 2026 estimates. The company’s increased capital expenditure projection for 2026 and disappointing user numbers seem to have hurt investor sentiment in the extended trading session, which, in turn, caused its share price to tumble.
While this share pullback might encourage investors to see this as a golden opportunity to invest in the Facebook-owner, some might remain skeptical about the company’s increased focus on artificial intelligence investments, of late, which are yet to produce new revenue streams.
Nevertheless, the company’s strengthening advertising business, along with the significant gains from its content recommendation initiatives, continues to be a major growth driver in the near term.
Against this backdrop, investors who believe in Meta’s long-term trajectory, yet wish to avoid the idiosyncratic risk and sharp volatility of a single-stock position, may find a middle ground in exchange-traded funds (ETFs). By selecting funds that feature Meta Platforms as a top-10 holding, investors can capture the potential upside of a rebound while mitigating the impact of company-specific shocks on their overall portfolio.
However, to determine if this post-earnings pullback is a temporary stumble or a sign of deeper structural shifts, it is essential to look beyond the headline figures. Before exploring the best ETFs for Meta exposure, let us examine the firm’s first-quarter performance across other critical operational metrics.
A Brief Analysis of META’s Q1 Results
META’s adjusted earnings of $7.31 per share comfortably surpassed the Zacks Consensus Estimate by 8.9%, while revenues beat the consensus mark by 1.5%. On a year-over-year basis, both top and bottom lines improved in double digits.
The total number of ad impressions served across META’s services increased 19%, driven primarily by growth in engagement and users, as well as ad load optimizations.
On the other hand, the global average price per ad increased 12% year over year in the first quarter, as META benefited from ad performance improvements, better macro conditions and currency tailwinds in international regions.
On the operational front, Meta’s technical refinements continue to yield tangible results for advertisers. Enhancements to the Lattice modeling and learning techniques, coupled with advancements in the GEM model architecture, fueled a notable 6% increase in conversion rates for landing page view ads during the first quarter.
To support its long-term AI roadmap, Meta has secured significant cloud capacity and infrastructure agreements slated to go live throughout 2026 and 2027. These multi-year commitments drove a substantial $107 billion increase in the company’s contractual obligations during the reported quarter.
META remains committed to scaling its models across multiple dimensions, increasing both size and complexity. By further integrating Large Language Models (LLMs) to deepen content understanding, the company aims to enhance its recommendation engines, more precisely matching users with content and interests to drive higher engagement and ad relevance.
The company is expected to incur capital expenditures in the range of $125-$145 billion during 2026, reflecting an increase from the earlier range of $115-$135 billion. This increase reflects META’s expectations for higher component pricing in 2026 and, to a lesser extent, additional data center costs to support future year capacity.
META-Heavy ETFs to Watch
Vanguard Communication Services ETF (VOX - Free Report)
This fund, with net assets worth $5.5 billion, offers exposure to 114 U.S. companies within the communication services sector. Of these, META carries the first spot, holding 20.58% of the fund.
VOX has rallied 32.6% over the past year. The fund charges 9 basis points (bps) as fees. It traded at a volume of 0.20 million shares in the last trading session.
iShares Global Comm Services ETF (IXP - Free Report)
This fund, with net assets worth $587.6 million, offers exposure to 66 companies that provide media, entertainment, social media, search engine, video/gaming, and telecommunication services. META holds the top spot, with 16.47% share in the fund.
IXP has surged 26.3% over the past year. The fund charges 40 bps as fees. It traded at a volume of 0.02 million shares in the last trading session.
Communication Services Select Sector SPDR ETF (XLC - Free Report)
This fund, with assets under management (AUM) worth $25.32 billion, offers exposure to 23 companies from the telecommunication services, media, entertainment and interactive media & services industries. Of these, META is at the top spot, holding 14.93% of the fund.
XLC has gained 21.7% over the past year. The fund charges 8 bps as fees. It traded at a good volume of 4.40 million shares in the last trading session.
Global X PureCap MSCI Communication Services ETF (GXPC - Free Report)
This fund, with net assets worth $72.4 million, offers exposure to 26 U.S. companies in the communication services sector. Of these, META is at the third spot, holding 21.74% of the fund.
GXPC has soared 25.9% over the past year. The fund charges 15 bps as fees. It traded at a volume of 0.09 million shares in the last trading session.