Apple Inc. AAPL reported robust fourth-quarter fiscal 2024 results, wherein it beat estimates for both revenues and earnings. The iPhone manufacturer reported record sales for iPhones but witnessed a decline in China. As such, Apple shares fell as much as 2% in after-market hours.
ETFs with the largest allocation to the tech titan have been in focus. Vanguard Information Technology ETF VGT, MSCI Information Technology Index ETF FTEC, iShares US Technology ETF IYW and Technology Select Sector SPDR Fund XLK have Apple as the top 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 $1.64, outpacing the Zacks Consensus Estimate of $1.49 and increasing from the year-ago earnings of $1.46. Revenues rose 6% year over year to an all-time high of $94.93 billion and edged past the estimated $94.56 billion, propelled by a rebound in iPhone sales (see: all the Technology ETFs here).
iPhone sales grew 6% to $46.2 billion, a sign that excitement for the iPhone 16 may be better than earlier reports had indicated. The company introduced the iPhone 16 in September, helping spur upgrades. It also updated Apple Watches and released new AirPods. Sales of the iPhone 15 were “stronger than 14 in the year-ago quarter, and 16 was stronger than 15,” Apple CEO Tim Cook said.
Services revenues, comprising iTunes, Apple Music, iCloud, Apple Pay and Apple Care, rose 12% year over year to $24.97 billion. Revenues from Wearables, Home and Accessories, which includes Apple Watch, AirPods, HomePod, Apple TV and Beats headphones, declined 3% to $9 billion. Mac sales rose 1.7% to $7.74 billion, while iPad sales increased 7.9% to $6.95 billion. However, Apple is still struggling in China, with sales falling 1% year over year to $15 billion.
Apple officially rolled out its new artificial intelligence features, known as Apple Intelligence, for users with the iPhone 15 Pro or iPhone 16 early this week. Apple chief Tim Cook said Apple Intelligence “marks the beginning of a new chapter” for the company’s innovation. New features are expected to be rolled out in December, including ChatGPT integration.
For the ongoing fiscal first quarter, the iPhone maker expects “low to mid-single digit” sales growth.
ETFs to Buy
Vanguard Information Technology ETF (VGT)
Vanguard Information Technology ETF manages $79.6 billion in its asset base and provides exposure to 316 technology stocks. It currently tracks the MSCI US Investable Market Information Technology 25/50 Index. 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 386,000 shares (read: Technology ETF (VGT) Hits New 52-Week High).
MSCI Information Technology Index ETF (FTEC)
MSCI Information Technology Index ETF is home to 297 technology stocks with an AUM of $12.6 billion. It follows the MSCI USA IMI Information Technology Index. Apple accounts for a 15.8% share in the basket.
MSCI Information Technology Index ETF has an expense ratio of 0.08%, while volume is solid at 192,000 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 15.3% of the assets.
iShares Dow Jones US Technology ETF has an AUM of $19.4 billion and charges 39 bps in fees and expenses. Volume is good as it exchanges 663,000 shares a day.
Select Sector SPDR Technology ETF (XLK)
Select Sector SPDR Technology ETF is the most popular and liquid ETF in the technology space, with AUM of $72.8 billion and an average daily volume of 4 million shares. It offers broad exposure to the technology sector and follows the Technology Select Sector Index. Select Sector SPDR Technology ETF holds about 69 securities in its basket, with Apple occupying the top position at 14.6% (read: What Lies Ahead of Apple Stock & ETFs: Up or Down?).
Select Sector SPDR Technology ETF charges 9 bps in fees per year from investors.
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Free: See Our Top Stock And 4 Runners UpApple 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
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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.
