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After the closing bell on Jul 31, Facebook’s parent company, Meta Platforms (META - Free Report) , cheered investors with better-than-expected second-quarter 2024 results. The company beat on both the top and bottom lines and issued a solid revenue forecast for the third quarter, signaling that robust digital ad spending can cover the cost of its artificial intelligence investments (see: all the Communication ETFs here).
META shares jumped 7.2% at the close in aftermarket hours. Investors seeking to tap the opportune moment could consider ETFs having a large allocation to this social media giant. 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 First Trust Dow Jones Internet Index Fund (FDN - Free Report) .
Earnings in Focus
Adjusted earnings per share came in at $5.16, topping the Zacks Consensus Estimate of $4.70 and increasing from the year-ago earnings of $3.23. Revenues grew 22% year over year to $39.07 billion and came above the estimated $38.34 billion. Advertising revenues, which account for the majority of Meta’s business, jumped 22% to $38.3 billion.
Meta’s global daily active users on at least one of the Family of services (Facebook, WhatsApp, Instagram or Messenger) increased 7% year over year to 3.27 billion as of June.
WhatsApp has reached more than 100 million monthly users in the United States and Threads, Meta's X rival, is about to hit more than 200 million monthly users. Meta AI is on track to be the most used AI assistant in the world by the end of the year,” said CEO Mark Zuckerberg.
The world’s largest social media platform expects to post revenues in the range of $38.5-$41 billion for the third quarter. The Zacks Consensus Estimate is pegged at $39.39 billion.
Meta would continue to spend big on AI infrastructure, anticipating 2024 capital expenditure in the range of $37-$40 billion, up by $2 billion at the lower end from its previous forecast of $35-$40 billion. It continues to expect total expenses in the range of $96-99 billion for 2024.
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 $18.2 billion in its asset base. It follows the Communication Services Select Sector Index and holds 22 stocks in its basket, with Meta Platforms occupying the top position at 20.9% share. About 44.3% of the portfolio is allocated to interactive media & services, while entertainment and media round off the next two (read: Participate in Paris Olympics With These Stocks & ETFs).
Communication Services Select Sector SPDR Fund charges 9 bps in annual fees and trades in an average daily volume of 3.6 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 108 stocks in its basket, with Meta Platforms occupying the top position at 23.5%.
Fidelity MSCI Communication Services Index ETF has amassed $1.1 billion in its asset base and trades in an average daily volume of 84,000 shares. It charges 8 bps in annual fees and has a Zacks ETF Rank #3 (Hold) 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 117 stocks in its basket, Meta Platform takes the top spot with a 23.5% share. Interactive media & services is the top sector, accounting for 51.6% of the portfolio, while movies & entertainment, integrated telecommunication services and cable & satellite round off the next three.
Vanguard Communication Services ETF has AUM of $3.9 billion and trades in a good volume of 152,000 shares a day, on average. It charges 10 bps in annual fees and has a Zacks ETF Rank #3 with a Medium risk outlook.
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 65 stocks in its basket, with Meta Platforms taking the top spot at 20.9% share. Interactive media & services dominates the fund’s return at 50%, followed by integrated telecommunication services (18.5%).
iShares Global Comm Services ETF has amassed $357.2 million in its asset base while trading at an average daily volume of 13,000 shares. The expense ratio is 0.42%. IXP has a Zacks ETF Rank #3 with a Medium risk outlook.
First Trust Dow Jones Internet Index Fund (FDN - Free Report)
First Trust Dow Jones Internet Index Fund follows the Dow Jones Internet Composite Index, giving investors exposure to the broad Internet industry. It holds about 41 stocks in its basket, with Netflix occupying the third spot at 6.2% (read: Netflix ETFs to Buy on Robust Q2 Earnings).
First Trust Dow Jones Internet Index Fund is the most popular and liquid ETF in the broad technology space, with AUM of $5.5 billion and an average daily volume of around 288,000 shares. FDN charges 51 bps in fees per year and has a Zacks ETF Rank #1 (Strong Buy) with a High risk outlook.
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Meta Jumps on Q2 Earnings Beat: ETFs to Gain
After the closing bell on Jul 31, Facebook’s parent company, Meta Platforms (META - Free Report) , cheered investors with better-than-expected second-quarter 2024 results. The company beat on both the top and bottom lines and issued a solid revenue forecast for the third quarter, signaling that robust digital ad spending can cover the cost of its artificial intelligence investments (see: all the Communication ETFs here).
META shares jumped 7.2% at the close in aftermarket hours. Investors seeking to tap the opportune moment could consider ETFs having a large allocation to this social media giant. 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 First Trust Dow Jones Internet Index Fund (FDN - Free Report) .
Earnings in Focus
Adjusted earnings per share came in at $5.16, topping the Zacks Consensus Estimate of $4.70 and increasing from the year-ago earnings of $3.23. Revenues grew 22% year over year to $39.07 billion and came above the estimated $38.34 billion. Advertising revenues, which account for the majority of Meta’s business, jumped 22% to $38.3 billion.
Meta’s global daily active users on at least one of the Family of services (Facebook, WhatsApp, Instagram or Messenger) increased 7% year over year to 3.27 billion as of June.
WhatsApp has reached more than 100 million monthly users in the United States and Threads, Meta's X rival, is about to hit more than 200 million monthly users. Meta AI is on track to be the most used AI assistant in the world by the end of the year,” said CEO Mark Zuckerberg.
The world’s largest social media platform expects to post revenues in the range of $38.5-$41 billion for the third quarter. The Zacks Consensus Estimate is pegged at $39.39 billion.
Meta would continue to spend big on AI infrastructure, anticipating 2024 capital expenditure in the range of $37-$40 billion, up by $2 billion at the lower end from its previous forecast of $35-$40 billion. It continues to expect total expenses in the range of $96-99 billion for 2024.
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 $18.2 billion in its asset base. It follows the Communication Services Select Sector Index and holds 22 stocks in its basket, with Meta Platforms occupying the top position at 20.9% share. About 44.3% of the portfolio is allocated to interactive media & services, while entertainment and media round off the next two (read: Participate in Paris Olympics With These Stocks & ETFs).
Communication Services Select Sector SPDR Fund charges 9 bps in annual fees and trades in an average daily volume of 3.6 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 108 stocks in its basket, with Meta Platforms occupying the top position at 23.5%.
Fidelity MSCI Communication Services Index ETF has amassed $1.1 billion in its asset base and trades in an average daily volume of 84,000 shares. It charges 8 bps in annual fees and has a Zacks ETF Rank #3 (Hold) 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 117 stocks in its basket, Meta Platform takes the top spot with a 23.5% share. Interactive media & services is the top sector, accounting for 51.6% of the portfolio, while movies & entertainment, integrated telecommunication services and cable & satellite round off the next three.
Vanguard Communication Services ETF has AUM of $3.9 billion and trades in a good volume of 152,000 shares a day, on average. It charges 10 bps in annual fees and has a Zacks ETF Rank #3 with a Medium risk outlook.
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 65 stocks in its basket, with Meta Platforms taking the top spot at 20.9% share. Interactive media & services dominates the fund’s return at 50%, followed by integrated telecommunication services (18.5%).
iShares Global Comm Services ETF has amassed $357.2 million in its asset base while trading at an average daily volume of 13,000 shares. The expense ratio is 0.42%. IXP has a Zacks ETF Rank #3 with a Medium risk outlook.
First Trust Dow Jones Internet Index Fund (FDN - Free Report)
First Trust Dow Jones Internet Index Fund follows the Dow Jones Internet Composite Index, giving investors exposure to the broad Internet industry. It holds about 41 stocks in its basket, with Netflix occupying the third spot at 6.2% (read: Netflix ETFs to Buy on Robust Q2 Earnings).
First Trust Dow Jones Internet Index Fund is the most popular and liquid ETF in the broad technology space, with AUM of $5.5 billion and an average daily volume of around 288,000 shares. FDN charges 51 bps in fees per year and has a Zacks ETF Rank #1 (Strong Buy) with a High risk outlook.