Apple Posts Record Revenues, Beats on Earnings: ETFs to Buy
After the closing bell yesterday, Apple Inc. AAPL came up with robust third-quarter fiscal 2022 results. The tech giant once again beat the estimates on both the top and bottom lines and posted record quarterly revenues. The solid performance came despite the strong dollar, inflationary fears, supply chain shortages and factory shutdowns in China.
As such, Apple shares rose about 4.2% in after-hours trading on elevated volume, putting ETFs having the largest allocation to the tech titan in focus. Technology Select Sector SPDR Fund XLK, Vanguard Information Technology ETF VGT, MSCI Information Technology Index ETF FTEC, iShares US Technology ETF IYW and iShares Russell Top 200 Growth ETF IWY have Apple as the top firm with a double-digit allocation and sport a Zacks Rank #1 (Strong Buy) or 2 (Buy).
Apple Results in Focus
Earnings per share came in at $1.20, outpacing the Zacks Consensus Estimate of $1.14 but declining from the year-ago earnings of $1.30. Revenues increased 1.9% year over year to a record $83 billion and edged past the estimate of $82 billion (see: all the Technology ETFs here).
iPhone sales grew 2.8% to a record $40.7 billion despite economic challenges. Services revenues, comprising iTunes, Apple Music, iCloud, Apple Pay and Apple Care, soared 12% year over year to a record $19.6 billion. Revenues from Wearables, Home and Accessories, which include Apple Watch, AirPods, HomePod, Apple TV and Beats headphones, dipped 8% to $8.1 billion. iPad sales dropped 2% to $7.2 billion, while Mac sales decined 10% to $7.4 billion. The slumping economy is hurting sales of advertising, accessories and home products.
The iPhone maker expects revenues to accelerate in the ongoing quarter. It expects to launch the iPhone 14 line along with its Apple Watch Series 8 later this fall.
ETFs to Buy
Technology Select Sector SPDR Fund (XLK)
Technology Select Sector SPDR Fund targets the broad technology sector and follows the Technology Select Sector Index. It holds about 76 securities in its basket, with Apple making up for a 23.8% share. Technology Select Sector SPDR Fund has key holdings in software, technology hardware, storage & peripherals, semiconductors & semiconductor equipment and IT services.
Technology Select Sector SPDR Fund is the most popular and heavily traded ETF, with AUM of $40.2 billion and an average daily volume of 7.7 million shares. The fund charges 10 bps in fees per year (read: Microsoft Q4 Earnings Miss, Outlook Solid: ETFs to Tap).
Vanguard Information Technology ETF (VGT)
Vanguard Information Technology ETF manages about $43 billion in its asset base and provides exposure to 379 technology stocks. It currently tracks the MSCI US Investable Market Information Technology 25/50 Index. Here, Apple accounts for a 22.9% share.
Vanguard Information Technology ETF has an expense ratio of 0.10%, while volume is solid at nearly 613,000 shares.
MSCI Information Technology Index ETF (FTEC)
MSCI Information Technology Index ETF is home to 368 technology stocks with AUM of $5.3 billion. It follows the MSCI USA IMI Information Technology Index. Apple accounts for a 22.9% allocation.
MSCI Information Technology Index ETF has an expense ratio of 0.08%, while volume is solid at 248,000 shares a day.
iShares US Technology ETF (IYW)
iShares Dow Jones US Technology ETF tracks the Russell 1000 Technology RIC 22.5/45 Capped Index, giving investors exposure to 148 U.S. electronics, computer software and hardware, and informational technology companies. Apple makes up 19% of the assets (read: 5 ETFs Up in Double-Digits Post Fed's Fourth Rate Hike).
iShares Dow Jones US Technology ETF has AUM of $6.6 billion and charges 41 bps in fees and expenses. Volume is good as it exchanges nearly 394,000 shares a day.
iShares Russell Top 200 Growth ETF (IWY)
iShares Russell Top 200 Growth ETF offers exposure to large U.S. companies that are expected to grow at an above-average rate relative to the market. It tracks the Russell Top 200 Growth Index, holding 111 stocks in its basket. Apple accounts for 15.3% of total assets. iShares Russell Top 200 Growth ETF has key holdings in information technology, consumer discretionary and healthcare with double-digit exposure each.
iShares Russell Top 200 Growth ETF has amassed $4.5 billion in its asset base and trades in an average daily volume of 392,000 shares. It has an expense ratio of 0.20%.
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Apple Inc. (AAPL) : Free Stock Analysis Report
Technology Select Sector SPDR ETF (XLK): ETF Research Reports
Fidelity MSCI Information Technology Index ETF (FTEC): ETF Research Reports
iShares U.S. Technology ETF (IYW): ETF Research Reports
Vanguard Information Technology ETF (VGT): ETF Research Reports
iShares Russell Top 200 Growth ETF (IWY): ETF Research Reports
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