After soaring in Tuesday’s after-hours session, shares of Netflix (NasdaqGS: NFLX) are poised to surge during regular trading hours Wednesday on the back of the company’s best quarter to date. California-based Netflix said fourth-quarter earnings jumped to a record of $83.4 million, or $1.35 per share, on quarterly subscriber growth of 4.3 million.
That was record quarterly subscriber growth for the company and for all of 2014, Netflix added 13 million subscribers around the world. Netflix opened trading Wednesday with a market value of nearly $25 billion, impressive but not enough to really boost the stock’s presence in the ETF community. [Netflix Doesn’t Mean Much to ETFs]
However, there are some ETFs, including some rookie funds, that merit consideration following the blowout results from Netflix. Between the two major U.S.-focused Internet ETFs, the PowerShares NASDAQ Internet Portfolio (NasdaqGS: PNQI) and the First Trust Dow Jones Internet Index Fund (NYSEArca: FDN), PNQI is the Netflix play because it has a 4.3% weight to the stock compared to 3.65% for FDN.
A pair of new actively managed ETFs feature larger weightings to Netflix. For example, the ARK Web x.0 ETF (NYSEArca: ARKW), which debuted on Sept. 30, 2014, sports a 5.8% weight to Netflix, making the stock the ETF’s largest holding and making ARKW the only ETF to feature Netflix as its largest holding.
ARKW’s stablemate, the ARK Innovation Fund (NYSEArca: ARKK), has a weight of almost 5% to Netflix, making the stock that ETF’s second-largest holding. With earnings season here, it is worth noting that ARKW’s and ARKK’s respective stories do not begin and end with Netflix. [New Players Among Internet ETFs]
Some market observers are pointing to the ebullience surrounding Netflix as a harbinger of things to come for other beloved momentum stocks, such as Alibaba (NYSE: BABA), Amazon (NasdaqGS: AMZN) and Apple (NasdaqGS: AAPL).
Alibaba “is down 17% from its highs. Netflix is going to China? Baby, Baba is already there,” notes Jeff Macke for Yahoo Finance. “Apple shares are off more than 10% from recent highs. It’s not exactly a “dip” given the run its had and Apple’s chart still looks bad with lower highs but anytime you get a dip has been a decent excuse and $100 makes a nice support level.”