A social media sector-specific exchange traded fund stood out Wednesday after Snap Inc. (NYSE: SNAP) earnings exceeded expectations shares and shares surged to all-time highs.

The Global X Social Media ETF (SOCL) was among the best performing non-leveraged ETFs of Wednesday, rising 4.9%.

SOCL YTD Performance

Meanwhile, Snap Inc. shares jumped 28.3% on Wednesday, SNAP makes up 7.7% of SOCL’s underlying holdings.

Snap’s third-quarter results revealed ongoing strength in the ad market despite a severe economic depression due to the coronavirus pandemic. Snap’s ad revenue growth was 52% year-over-year.

“Snap set the tone for digital media earnings by delivering one of the largest expectations beats for a scaled advertising platform in recent memory,” Stifel analysts said in a note, according to MarketWatch.

Deutsche Bank analysts said that Snap’s results implied a “bonanza for online advertising”, CNBC reports.

Snap Chief Business Officer Jeremi Gorman previously stated that the company saw positive momentum in the ad market, including brand advertising, which weakened during the the early days of the coronavirus pandemic.

“We saw the beginnings of a recovery from brand advertisers, and continued resilience from direct response advertisers, reinforcing our confidence in the long-term positioning of our business,” Gorman said on the company’s earnings call.

Snap Emblematic of Broader Online Ads

Deutsche Bank analysts argued that Snap’s showing bodes well for other companies deeply impeded in the online ad space, notably those like Twitter, because of Snap’s comments on the acceleration of spend on the brand side.

Twitter (NYSE: TWTR) shares were also 8.4% higher on Wednesday. TWTR makes up 9.6% of SOCL’s underlying holdings.

“Our field checks, along with Snap’s 3Q results, suggest that advertiser demand strengthened over the course of the quarter, particularly for smaller platforms like Pinterest, Twitter, and Snap,” Goldman Sachs said in the note.

The strong online presence may also reflect an acceleration of ongoing trends after the coronavirus pandemic forced many consumers to stay at home and seek alternative avenues of entertainment through online media outlets.

“We are witnessing an acceleration in the decline of linear general entertainment content consumption, a resurgence in brand spending as advertisers return to the market, ad boycotts by leading brands at Facebook, significant challenges at peer TikTok, a return of highly engaging digital sports content, and an improvement in the types of advertising inventory that Snap is creating,” MoffetNathanson analysts summarized in the “As If 2020 Never Happened” note. “While it isn’t a shock that Snap is doing well, we still marvel at the overall size of the revenue beat this quarter.”

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