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Take a Bite of Apple With These ETFs Post Solid Q4 Results

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After the closing bell yesterday, Apple Inc. (AAPL - Free Report) encouraged investors with robust fourth-quarter fiscal 2019 results, wherein it topped both earnings and revenue estimates and offered an upbeat holiday quarter outlook (read: Apple ETFs in the Spotlight Ahead of Fiscal Q4 Earnings).

Apple Q4 Results in Focus

Earnings per share came in at $3.03, beating the Zacks Consensus Estimate by 19 cents and improving 4% from the year-ago earnings. Revenues rose 2% year over year to $64 billion and edged past the estimate of $62.45 billion. This represents the highest Q4 revenues ever, fueled by accelerating growth from Services, Wearables and iPad.

Services revenues, comprising iTunes, Apple Music, iCloud, Apple Pay and Apple Care, climbed 18% year over year to an all-time high of $12.5 billion. Revenues from Wearables, Home and Accessories, which includes the Apple Watch, AirPods, HomePod, Apple TV, and Beats headphones, soared 54% to $6.52 billion and Pad revenues increased 16.9% to $4.66 billion. Meanwhile, iPhone sales declined 9.2% year over year to $33.36 billion while Mac revenues dropped 4.8% to $6.99 billion.

Chief Executive Tim Cook is optimistic about the holiday quarter given the positive buzz surrounding iPhone 11, AirPods Pro, Apple TV+ service and Apple Arcade which is the company’s video game service. As such, the gadget-maker foresees total revenues in the range of $85.5-$89.5 billion for the first quarter of fiscal 2020. The mid-point of the guidance is above the current Zacks Consensus Estimate of $86.2 billion. The upbeat guidance also came on the back of increasing revenues driven by strong demand for accessories such as Apple Watch and AirPods as well as new services such as Apple Card credit card and a streaming television service set to begin on Nov 1. Customers will be able to buy iPhones using the Apple Card with no interest for 24 months (read: Should You Buy Apple ETFs Ahead of the Holiday Season?).

The new forecast suggests that Apple will return to growth, after missing last year’s holiday period sales targets.

Market Impact

Following the results, shares of Apple climbed more than 2% in aftermarket hours on elevated volume. The stock currently has a Zacks Rank #3 (Hold) and a solid Value Score of B. Additionally, it belongs to a top-ranked Zacks industry (top 40%), suggesting some smooth trading in the days ahead.

ETFs to Tap

Given this, investors could consider the following ETFs with the largest allocation to the tech titan. These funds have Apple as the top or second firm with a double-digit allocation and sport a Zacks Rank #1 (Strong Buy) with a Medium risk outlook.

Select Sector SPDR Technology ETF (XLK - Free Report)

This most-popular technology ETF has $23.1 billion in AUM and charges 13 bps in fees per year from investors. AAPL makes up for roughly 18.3% of assets.

MSCI Information Technology Index ETF (FTEC - Free Report)

With AUM of $2.6 billion, the product allocates 17.1% in Apple. The ETF has 0.08% in expense ratio (see: all the Technology ETFs here).

iShares Dow Jones US Technology ETF (IYW - Free Report)

This ETF provides investors exposure to technology stocks with 16.4% allocation in Apple. The fund has AUM of $4.3 billion and charges 42 bps in fees and expenses.

Vanguard Information Technology ETF (VGT - Free Report)

This fund manages about $22.1 billion in its asset base with 16.3% allocation in Apple. It has 0.10% in expense ratio.

Invesco QQQ (QQQ - Free Report)

This ETF provides exposure to the largest domestic and international nonfinancial companies listed on the Nasdaq Stock Market based on market capitalization and Apple accounts for 11.5% share. It has AUM of $77.5 billion and charges 20 bps in annual fees (read: 10 Top-Ranked ETFs Beating S&P 500 This Year).

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