Amazon Q3 Earnings Triple YoY: ETFs to Tap
After the closing bell on Thursday, Amazon AMZN reported robust third-quarter results, wherein it beat both earnings and revenue estimates. Amazon's cloud computing platform, a record-high Prime Day and a rapidly growing ad sales business drove the results.
Shares of AMZN rose as much as 5.3% in aftermarket hours on elevated volume. Investors could tap the strength with the ETFs having a substantial allocation to this online behemoth. These include ProShares Online Retail ETF ONLN, Fidelity MSCI Consumer Discretionary Index ETF FDIS, Vanguard Consumer Discretionary ETF VCR, Consumer Discretionary Select Sector SPDR Fund XLY and VanEck Vectors Retail ETF RTH.
The e-commerce giant reported earnings per share of 85 cents, outpacing the Zacks Consensus Estimate of 58 cents. Earnings more than tripled from the year-ago earnings. Revenues grew 13% year over year to $143.1 billion and edged past the consensus estimate of $141.5 billion.
Amazon’s cloud computing business — Amazon Web Services — revenues grew 12% year over year to $23.1 billion but remained flat with the prior quarter.
The world's largest online retailer expects revenues in the range of $160-$167 billion for the fourth quarter of 2023. The Zacks Consensus Estimate is pegged at $167.01 billion.
ETFs to Buy
ProShares Online Retail ETF (ONLN)
ProShares Online Retail ETF offers exposure to companies that principally sell online or through other non-store channels and then zeros in on the companies that reshape the retail space. It tracks the ProShares Online Retail Index, holding 19 stocks in its basket. Amazon is the top firm, accounting for 23.9% of the portfolio (read: Why to Buy Online Retail ETFs Now?).
ProShares Online Retail ETF has amassed $89.3 million in its asset base and currently trades in a moderate volume of around 12,000 shares a day on average. It charges 58 bps in annual fees from investors.
Fidelity MSCI Consumer Discretionary Index ETF (FDIS)
Fidelity MSCI Consumer Discretionary Index ETF tracks the MSCI USA IMI Consumer Discretionary Index, holding 300 stocks in its basket. Of these, Amazon takes the top spot with a 21.7% share.
Fidelity MSCI Consumer Discretionary Index ETF has amassed $1.1 billion in its asset base while trading in a good volume of around 72,000 shares a day on average. It charges 8 bps in annual fees from investors and currently has a Zacks ETF Rank #2 (Buy) with a Medium risk outlook.
Vanguard Consumer Discretionary ETF (VCR)
Vanguard Consumer Discretionary ETF currently follows the MSCI US Investable Market Consumer Discretionary 25/50 Index and holds 307 stocks in its basket. Of these, Amazon occupies the top position, with a 21.6% allocation. Broadline Retail takes the largest share at 24%, while automobile manufacturers, restaurants and home improvement retail round off the next three spots (read: ETFs That Could Be Impacted by the Student Loan Payment Restart).
VCR charges investors 10 bps in annual fees, while volume is moderate at nearly 57,000 shares a day. The product has managed about $4.5 billion in its asset base and currently carries a Zacks ETF Rank #1 with a Medium risk outlook.
Consumer Discretionary Select Sector SPDR Fund (XLY)
Consumer Discretionary Select Sector SPDR Fund offers exposure to the broad consumer discretionary space by tracking the Consumer Discretionary Select Sector Index. It is the largest and most popular product in this space, with AUM of nearly $15.8 billion and an average daily volume of around 5 million shares. Holding 53 securities in its basket, Amazon takes the top spot with 23.2% of assets. Broadline retail, hotels, restaurants & leisure, automobiles, and specialty retail are the top four sectors with double-digit exposure each.
Consumer Discretionary Select Sector SPDR Fund charges 0.10% in expense ratio and has a Zacks ETF Rank #1, at present, with a Medium risk outlook.
VanEck Vectors Retail ETF (RTH)
VanEck Vectors Retail ETF provides exposure to the 26 largest retail firms by tracking the MVIS US Listed Retail 25 Index, which measures the performance of the companies involved in retail distribution, wholesalers, online, direct mail and TV retailers, multi-line retailers, specialty retailers and food and other staples retailers. Amazon takes the top position in the basket with a 20% share.
VanEck Vectors Retail ETF has amassed $151.9 million in its asset base and charges 35 bps in annual fees. It trades in a lower volume of 4,000 shares a day on average. VanEck Vectors Retail ETF presently has a Zacks ETF Rank #3 (Hold) with a Medium risk outlook.
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Amazon.com, Inc. (AMZN) : Free Stock Analysis Report
VanEck Retail ETF (RTH): ETF Research Reports
Consumer Discretionary Select Sector SPDR ETF (XLY): ETF Research Reports
Vanguard Consumer Discretionary ETF (VCR): ETF Research Reports
Fidelity MSCI Consumer Discretionary Index ETF (FDIS): ETF Research Reports
ProShares Online Retail ETF (ONLN): ETF Research Reports
