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Apple Gears Up for Glowtime Event: ETFs in Focus

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Apple’s (AAPL - Free Report) “It’s Glowtime” event is due to take place at the iconic Steve Jobs Theater in Cupertino today. The technology giant is set to unveil the iPhone 16 series smartphones and other major products, including a new version of AirPods and three new Apple Watches.
    
Ahead of the event, ETFs having the largest allocation to the tech titan are in focus. Vanguard Information Technology ETF (VGT - Free Report) , MSCI Information Technology Index ETF (FTEC - Free Report) , iShares US Technology ETF (IYW - Free Report) , iShares Russell Top 200 Growth ETF (IWY - Free Report) and Vanguard Mega Cap Growth ETF (MGK - Free Report) have Apple as the top or second firm with a double-digit allocation. These ETFs have a Zacks ETF Rank #1 (Strong Buy) or 2 (Buy).

Insights Into the Potential Launch

iPhone 16: Apple is projected to release four versions of the iPhone 16 series — the iPhone 16, iPhone 16 Plus, iPhone 16 Pro, and the iPhone 16 Pro Max. All the models will feature generative AI capabilities as the tech behemoth looks to bolster sales of its iconic device. The iPhone 16 and the iPhone 16 Plus are expected to be powered by the A18 Bionic chip, while the iPhone 16 Pro and iPhone 16 Pro Max may come with the A18 Pro chip.

The iPhone 16 and 16 Plus are likely to get a major performance boost with the addition of the Apple A18 chipset and a base 8GB RAM variant (up from 6GB last year). Meanwhile, the new iPhone 16 Pro models are likely to be powered by the A18 Pro chipset with support for 8GB of RAM. They are also likely to get an improved Neural Engine, which is likely to be a big marketing strategy for Apple to show off its AI capabilities (read: Tech ETFs That Won Amid NVIDIA-Led Tech Rout).

Rumors also suggest that there could be a new touch-sensitive “Capture Button,” which could make its debut on the iPhone 16 Pro variants. Apple is also likely to introduce a new gold titanium color this year, replacing last year's blue titanium variant.

AirPods: Apple is expected to replace the AirPods 2 with an entry-level AirPods 4 variant, featuring a modern design and improved audio capabilities. Apple might also replace the 2021 AirPods 3 with a higher-end AirPods 4 variant. Both new AirPods models are expected to feature a similar design. The higher-end model is expected to keep the AirPods 4 tag, while the entry-level model may get rebranded as “AirPods Lite.”

Apple Watch: Apple is expected to debut the new Apple Watch Series 10 at the event, along with the Apple Watch Ultra 3. Speculations are also buzzing that Apple may also launch a more affordable third-generation Apple Watch SE.

Solid Fundamentals

Apple boasts the world’s highest stock market valuation, at nearly $3.3 trillion. It has seen a positive earnings estimate revision of a couple of cents for the current fiscal year (ending September 2024) and three cents for the next fiscal over the past 30 days. 

Apple currently has an average brokerage recommendation (ABR) of 1.13 on a scale of 1 to 5 (Strong Buy to Strong Sell), calculated based on the actual recommendations (Buy, Hold, Sell etc.) made by 40 brokerage firms. Of the 40 recommendations deriving the current ABR, 36 are Strong Buy and three are Buy. Strong Buy and Buy, respectively, account for 90% and 7.5% of all recommendations. 

Based on short-term price targets offered by 38 analysts, the average price target for Microsoft comes to $499.58. The forecasts range from a low of $375.00 to a high of $600.00. 

Currently, Apple carries a Zacks Rank #3 (Hold) and a Growth Score of B, suggesting that the iPhone maker is primed for growth. Apple stock is cheap, trading at a P/E ratio of 32.97 compared with Amazon’s (AMZN) 36.13 times, and Netflix’s (NFLX) 34.89 times (see: all the Technology ETFs here).  

ETFs in Focus

Vanguard Information Technology ETF (VGT - Free Report) - Apple accounts for a 17.2% share.

MSCI Information Technology Index ETF (FTEC - Free Report) - Apple accounts for a 17.5% share in the basket. 

iShares US Technology ETF (IYW - Free Report) - Apple makes up 16.7% of the assets.

iShares Russell Top 200 Growth ETF (IWY - Free Report) - Apple accounts for a 14% share in the basket.

Vanguard Mega Cap Growth ETF (MGK - Free Report) - Apple accounts for 13.4% of the total assets
 

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