Apple ETFs Jump on Earnings, $110B Buyback

The single-stock AAPU, as well as Vanguard's VGT and SPDR's XLK, all moved higher Friday.

sumit
|
Senior ETF Analyst
|
Reviewed by: etf.com Staff
,
Edited by: Ron Day

Exchange-traded funds holding Apple Inc. moved higher Friday after the iPhone maker reported first quarter results that exceeded expectations and announced a $110 billion share buyback.

Shares of Cupertino, California-based Apple jumped around 7%. Apple reported it earned $1.53 per share, beating the estimate of $1.51, while revenues of $90.8 billion beat the $90.4 billion expectation.

The stock was also supported by the company's announcement that it would buy back an additional $110 billion worth of shares. That was more than the $90 billion in buybacks the company had announced in recent years.

Revenues for Apple have fallen year-over-year in five of the past six quarters, but investors were assuaged by comments from Apple that indicated growth in the low single digits for Q2.

Apple is held by 458 exchange-traded funds, including big weightings in many tech ETFs like the $63 billion Vanguard Information Technology ETF (VGT) and the $62 billion Technology Select Sector SPDR Fund (XLK), which allocate over a fifth of their portfolios to the stock. The stock also has a hefty 8.5% weighting in the popular $250 billion Invesco QQQ Trust (QQQ). All of those funds rose today.

For aggressive traders who want more concentrated exposure to Apple, the $60 million Direxion Daily AAPL Bull 2X Shares (AAPU) offers just that. That fund jumped 13% midday Friday, twice the gain for shares of Apple.

Low Expectations

Expectations were low for Apple ahead of the release of its first quarter earnings report. The stock was down by 10% since the start of the year, sharply lagging the S&P 500’s 6.2% return.

After today’s jump, Apple’s losses have been cut to 4%.

Industry channel checks had suggested that the iPhone had lost significant market share in China.

But even though Apple’s China revenue dropped 8% from a year ago in Q1, the company attributed it to a drop in sales of other products—not the iPhone.

Apple CEO Tim Cook noted that iPhone revenues in China actually increased, which was a relief for investors.  

Sumit Roy is the senior ETF analyst for etf.com, where he has worked for 13 years. He creates a variety of content for the platform, including news articles, analysis pieces, videos and podcasts.

Before joining etf.com, Sumit was the managing editor and commodities analyst for Hard Assets Investor. In those roles, he was responsible for most of the operations of HAI, a website dedicated to education about commodities investing.

Though he still closely follows the commodities beat, Sumit covers a much broader assortment of topics for etf.com, with a particular focus on stock and bond exchange-traded funds.

He is the host of etf.com’s Talk ETFs, a popular video series that features weekly interviews with thought leaders in the ETF industry. Sumit is also co-host of Exchange Traded Fridays, etf.com’s weekly podcast series.

He lives in the San Francisco Bay Area, where he enjoys climbing the city’s steep hills, playing chess and snowboarding in Lake Tahoe.