The Zacks Analyst Blog Highlights: XLK, VOX, FDIS and XLY
For Immediate Release
Chicago, IL – August 3, 2020 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. ETFs recently featured in the blog include: XLK, VOX, FDIS and XLY.
Here are highlights from Tuesday’s Analyst Blog:
More Run for Tech ETFs After Sizzling Earnings?
Jul 30 was marked with big tech earnings releases. After market close, tech behemoths Facebook, Amazon, Apple and Alphabet, each reported quarterly results that topped estimates, reaffirming the sustainability (or rather the winning spree) of tech stocks amid the pandemic.
How Stellar Were Tech Earnings in Q2?
Facebook’s revenues 11% over last year as its advertising business remained strong. Alphabet’s ad business was however struggling, with Google ad revenues sliding 8% year over year. But Alphabet’s overall top and bottom line still surpassed estimates. Facebook’s daily active users jumped 13% and monthly active users rose 12%.
Facebook’s revenues of $18.69 billion and EPS of $1.80 topped respectively the estimates of $17.29 billion and $1.44. Alphabet’s revenues of $31.6 billion and EPS of $10.13 also beat estimates of $30.58 billion and $8.43, respectively.
Amazon’s net income doubled year over year to $5.2 billion and net sales jumped 40% during the quarter, as pandemic boosted the demand for online shopping. Amazon’s earnings per share of $10.30 beat estimates of $1.74 while revenues of $88.91 billion surpassed estimates by $7.35 billion.
Apple’s revenues of $59.7 billion in the second quarter surpassed estimates by $7.75 billion, on strong hardware product and services revenues. Earnings per share of $2.58 beat estimates by 55 cents.
Tech Sector a Winner This Year, Will Sizzle Ahead Too
Technology has been a winning sector amid the coronavirus outbreak as social distancing norms enacted globally to mitigate the spread of the virus compelled people to stay at home, online shopping binge and work as well as learn from home. Technology Select Sector SPDR Fund was up 17.9% in the past three months versus 11.9% gains in the S&P 500.
Though many corners of the global economy have reopened, the trend for work-and-learn-from home should stay strong. This is especially true given that the second wave of contagion has been rife. Although some slowdown in online activities may be expected thanks to the maturation of the winning trend (Facebook said that users metrics are likely be flat to down slightly in most regions during the current quarter), the allure for tech stocks will in fact continue.
Tech companies are cash-rich. And cash seems to be the most important asset to individual and corporations right now. Hoarding cash could be a great strategy for the near term as inflation risks may be a distant possibility.
If this was not enough, big tech companies are now eyeing the virus testing market. Verily Life Sciences, a sister company of Google, hurried to introduce a free coronavirus-screening site for the public and set up testing locations in March.
Microsoft and the large insurer UnitedHealth joined forces on a free symptom-checking app. Fitbit launched a program that includes a daily symptom-checking app for employees and a workforce health-monitoring dashboard for employers (read: Big Techs Making the Most of Medical Emergency: ETFs to Win).
ETFs in Focus
Against this backdrop, we highlight below a few technology ETFs that revolver around big tech stocks.
Apple-Heavy ETF – Technology Select Sector SPDR ETF XLK
Alphabet-Heavy ETF – Vanguard Communication Services ETF VOX
Amazon-Heavy ETFs – Fidelity MSCI Consumer Discretionary Index ETF FDIS, Consumer Discretionary Select Sector SPDR Fund XLY
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performancefor information about the performance numbers displayed in this press release.
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Technology Select Sector SPDR ETF (XLK): ETF Research Reports
Consumer Discretionary Select Sector SPDR ETF (XLY): ETF Research Reports
Vanguard Communication Services ETF (VOX): ETF Research Reports
Fidelity MSCI Consumer Discretionary Index ETF (FDIS): ETF Research Reports
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