Apple (AAPL) has been one of the hottest stocks recently, and following its earnings Tuesday, returned back to its $1 trillion market cap. The tech giant beat market analyst expectations by 10 cents, hitting an EPS of $2.46, and catapulting investor interest and stock prices higher after the release.
Apple (AAPL) stock is currently priced at $214.93 as of 2:23 pm ET Wednesday, with a market cap of approximately $1,013,000,000,000.
There are over 250 ETFs that include Apple as a staple in their portfolios. While the weighting of stocks typically varies depending on the ETF and what it is trying to accomplish, there are a number of ETFs that are heavily weighted with Apple, allowing a savvy investor to participate in the stock’s recent and future performance, without buying AAPL itself.
A sample of ETFs that allows for the most exposure to Apple includes the following:
The Technology Select Sector SPDR Fund (XLK) with a 17.36% weighting of Apple, Fidelity MSCI Information Technology Index ETF (FTEC) with 15.50% Apple, iShares U.S. Technology ETF (IYW), which contains 14.93% Apple, Vanguard Information Technology ETF (VGT), adding 14.32% Apple, and iShares Global Tech ETF (IXN), with 13.51% Apple stock.
While Apple is a key element of the Nasdaq Composite Index, the tech monster has returned about 30% over the past three months, dwarfing the Nasdaq Composite Index’s gain of 13.3%. This robust performance can continue if the company persists in beating quarterly estimates, as it did yesterday.
Much of Apple’s growth is likely due to its subscription based services, which include subscriptions like Apple Music and iCloud, and Apple’s Wearables business, which includes hardware products such as AirPods and the Apple Watch. Apple CEO Tim Cook explained on CNBC recently, “It was our best quarter ever for services, with revenue reaching $11.5 billion.” Apple’s services revenue rose 16% from $9.19 billion in sales the same period last year.
Guy Adami, a trader on CNBC’s “Fast Money,” was also supportive of the fact that Apple’s Services Industry is driving its EPS growth, explaining recently on CNBC,
“I’m not going to pretend to be disingenuous. For me to pretend I’ve been some raging Apple bull — I have not. Most of the people on the desk have; I haven’t. But one thing we’ve said is as revenues continue to grow in services, and now they’re 19.7%, the valuation of Apple has to get better, and that [is], I think, what’s happening now. The question you have to ask yourself is, as that number of services goes from 20% to 25 [%], what is the right multiple for Apple? I would submit it’s close to a market multiple, maybe 18 times. That gets you to a $235 stock, thereabouts. If you want to give them a bit of a discount, 16, 16.5 [times], it’s fairly priced here. But I think that’s the calculus that you have to do going out of these numbers now.”
For those who agree with Adami’s sentiment, there is an ETF for them to get on board with Apple.
For more tech ETF news and strategy, visit our Innovative ETFs Channel.