ETF Spotlight: FBL Soars on Meta Stock Performance
FBL surged after Meta surpassed analysts' expectations for second quarter earnings.
The GraniteShares 2x Long META Daily ETF (FBL) soared as much as 22% following Meta Platforms Inc. strong beat in second quarter earnings late Wednesday—the fund's latest gains continuing a months-long upswing tied to the social media giant's improved performance.
FBL, which aims to deliver more than two times the price return for a single day of Meta stock, has risen over 68.5% year-to-date. Meta's share price has risen about 44% over the same period.
(FBL closed up nearly 10% in Thursday trading, while Meta rose almost 5%).
In its Q2 release after U.S. equity markets closed, Meta announced revenue of just over $39 billion and $5.16 earnings per share, surpassing analysts' expectations for $38.3 billion and $4.73, respectively. The Menlo Park, Calif.-based company's revenues have climbed by at least 20% in each of the past four quarters amid steady increases in digital advertising. In a statement Wednesday, Meta CEO Mark Zuckerburg also tied the company's upswing to its investment in AI technology.
"We had a strong quarter, and Meta AI is on track to be the most used AI assistant in the world by the end of the year," Zuckerberg said.
Meta Stock Up on AI Investment
Meta's results offered a bright spot among tech giants that have sagged in recent weeks, and even exceeded search giant Alphabet.
"Zuckerberg’s comments that its AI investments are already paying off pushed the stock sharply higher his week, fueling double the gains for the leveraged FBL," said etf.com Senior Analyst Sumit Roy. "Notably, Meta’s revenue growth of 22% in Q2 was significantly higher than the 14% growth that the other ad giant Alphabet saw during the quarter."
FBL, which has accumulated $115 million in assets since it debuted about 20 months ago, according to etf.com data. The fund is a short-term investment product. Purchasers holding shares for longer than a day must monitor and rebalance their positions to attempt to achieve the two times multiple. The shares assume added volatility because of the fund's lack of diversification. The ETF caps the maximum loss to the full amount invested.
