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Apple’s Upcoming Earnings Have Huge Implications For These ETFs

Apple Earnings Preview

Apple has rallied substantially into its earnings date, jumping some 11% since its last report. The stock is now back within striking distance of its 52-week high of $122.44, which could well be blown right through if all-important Q1 (holiday period) results deliver.

On average, Wall Street analysts are looking for AAPL to report Q1 EPS of $3.22 on revenues of $77.37 billion. That's a lower profit than the $3.28 the company posted last year, but an uptick from the $75.9 billion in revenue in the year-ago period. Perhaps more importantly, that revenue number would represent an end to Apple's dubious losing streak of three straight quarters with year-over-year revenue declines.

Apple is also expected to have sold 78 million iPhones fiscal Q1, which includes the holiday period, up from 75 million in the prior year. Given the company's heavy reliance on the iPhone as its key revenue driver, this number is often seen as just as important as EPS or revenue results in Apple's report.

ETFs With Outsized AAPL Exposure

Most of the time, ETF investors don't have to worry about single stocks having a major effect on their holdings. But Apple is the largest company in the world, and is a notable exception to this general rule. Just about every investor in equity-based ETFs has significant Apple exposure, although they may not be aware of it.

Apple represents almost 11% of the holdings of the Nasdaq 100 (ETF: QQQ ), and believe it or not, some other funds have even much more exposure than that. Take the iShares Dow Jones US Technology ETF ( IYW ) , for example. IYW has the largest percentage exposure to Apple out of all U.S.-listed funds, with a whopping 16.08% of its assets invested in AAPL. All IYW owners should absolutely pay close attention to Apple's price performance as a result, with its 5% year-to-date gains perhaps in jeopardy if Apple misses on its report.

The Select Sector SPDR Technology ETF ( XLK ) , up nearly 4% this year, counts Apple as a 13.7% share of its holdings. Similarly, the Vanguard Information Technology ETF ( VGT ) has 13.2% of its portfolio dedicated to Apple, and the MSCI Information Technology Index ETF ( FTEC ) also has a 13.2% allocation.

All eyes will be on Apple tomorrow after the closing bell, and it should be pretty clear by now that ETF investors ought to be watching as well.

Apple Inc. ( NASDAQ:AAPL ) was trading at $121.24 per share on Monday morning, down $0.71 (-0.58%). Year-to-date, AAPL has gained 4.68%, versus a 1.58% rise in the benchmark S&P 500 index during the same period.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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