Apple Inc. AAPL reported robust third-quarter fiscal 2024 results, wherein it beat both earnings and revenue estimates. The iPhone manufacturer returned to revenue growth and pinned hopes on AI for iPhone upgrades.
Apple shares rose nearly 1% in after-market hours. Investors seeking to believe in the company’s AI plan should consider ETFs having the largest allocation to the tech titan.
Vanguard Information Technology ETF VGT, MSCI Information Technology Index ETF FTEC, iShares US Technology ETF IYW, iShares Russell Top 200 Growth ETF IWY and Vanguard Mega Cap Growth ETF MGK 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).
Apple Earnings in Focus
Earnings per share came in at $1.40, beating the Zacks Consensus Estimate of $1.34 and increasing 11.1% from the year-ago earnings. Revenues rose 5% year over year to $85.78 billion and edged past the estimated $84.4 billion (see: all the Technology ETFs here).
iPhone sales dipped 1% to $39.3 billion, a huge improvement from the 10% decline recorded in the previous quarter. Services revenues, comprising iTunes, Apple Music, iCloud, Apple Pay and Apple Care, rose 14% year over year to an all-time high of $24.2 billion. Revenues from Wearables, Home and Accessories, which includes Apple Watch, AirPods, HomePod, Apple TV and Beats headphones, declined 2.2% to $8.1 billion. Mac sales rose 2.5% to $7 billion, driven by the start of the back-to-school shopping season, while iPad sales increased 23.7% to $7.2 billion due to the release of new iPads during the quarter for the first time since 2022, which spurred a wave of upgrades.
However, Apple is still struggling in China, with sales falling 6.5% year over year to $14.7 billion.
The tech giant is set to launch a host of AI-theme initiatives heading into the release of its iPhone 16 later this fall. The next model, the iPhone 16, is expected to be equipped with an AI chip, which would spur iPhone upgrades in the coming months, helping the company re-emerge from a sales slowdown that has hit its China business hard (read: Time to Take a Bite Out of Apple ETFs Now?).
For the ongoing fiscal fourth quarter, the iPhone maker expects overall revenues to grow at a rate similar to the 5% growth in the third quarter.
ETFs to Buy
Vanguard Information Technology ETF (VGT)
Vanguard Information Technology ETF manages $71.7 billion in its asset base and provides exposure to 320 technology stocks. It currently tracks the MSCI US Investable Market Information Technology 25/50 Index. Here, Apple accounts for a 16.1% share. Semiconductors, systems software, technology hardware storage & peripheral, and application software are the top four sectors.
Vanguard Information Technology ETF has an expense ratio of 0.10%, whereas volume is solid at nearly 478,000 shares (read: Tech ETFs Faceoff: Apple Vs. Microsoft).
MSCI Information Technology Index ETF (FTEC)
MSCI Information Technology Index ETF is home to 297 technology stocks with an AUM of $11 billion. It follows the MSCI USA IMI Information Technology Index. Apple accounts for a 16% share in the basket.
MSCI Information Technology Index ETF has an expense ratio of 0.08%, while volume is solid at 339,000 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 140 U.S. electronics, computer software and hardware, and informational technology companies. Apple makes up 15.1% of the assets.
iShares Dow Jones US Technology ETF has an AUM of $18 billion and charges 40 bps in fees and expenses. Volume is good as it exchanges 795,000 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 106 stocks in its basket. iShares Russell Top 200 Growth ETF has key holdings in information technology, consumer discretionary and communications with double-digit exposure each (read: ETF Strategies for Second Half of 2024).
iShares Russell Top 200 Growth ETF has amassed $11.5 billion in its asset base and trades in an average daily volume of 375,000 shares. It has an expense ratio of 0.20%.
Vanguard Mega Cap Growth ETF (MGK)
Vanguard Mega Cap Growth ETF offers diversified exposure to the largest growth stocks in the U.S. market. It tracks the CRSP US Mega Cap Growth Index and holds 71 securities in its basket, with Apple accounting for 12.4% of the total assets.
Vanguard Mega Cap Growth ETF charges 7 bps in annual fees and trades in a good volume of around 319,000 shares a day on average. The fund has an AUM of $20.8 billion.
Research Chief Names "Single Best Pick to Double"
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Free: See Our Top Stock And 4 Runners UpApple Inc. (AAPL) : Free Stock Analysis Report
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
Vanguard Mega Cap Growth ETF (MGK): ETF Research Reports
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
