ETFs
Broadcom Jumps on Q2 Profits: ETF to Buy – June 13, 2024
Broadcom (AVGO quick quoteAVGO – Free report) reported strong results for the second quarter of fiscal 2024, beating both profit and revenue estimates and offering upbeat annual guidance driven by strong demand for artificial intelligence (AI) products. The chipmaker also announced a 10-for-1 stock split, which is expected to begin trading on a split-adjusted basis on July 15.
AVGO shares jumped 14% in after-market trading and nearly 14% in pre-market trading as of this writing. Investors can exploit the robust growth with the help of ETFs, which have the largest allocation to this chipmaker. These are Amplify Cybersecurity ETF (HACK Quick QuoteTO HACK – Free report) , ETF Pacer Data and the digital revolution (Quick quote TRFKTRFK – Free report) , Invesco PHLX Semiconductor ETF (Quick quote SOXQSOXQ – Free report) , iShares US Tech Independence Focused ETF (IETC quick quoteCIET – Free report) And First Trust NASDAQ Technology Dividend Index Fund (Quick quote TDIVIVDD – Free report) .
Focus on profits
Earnings per share came in at $10.96, easily beating the Zacks Consensus Estimate of $10.79 and up 6.2% from the year-ago quarter. Revenue jumped 43% year over year to $12.5 billion and surpassed the consensus mark of $12.04 billion.
Broadcom is benefiting from the AI boom because its devices can run the different types of AI applications that have delighted the tech industry. Notably, Broadcom works with Google (GOOGL Quick QuoteGOOGLE – Free report), which partly designs its own AI chip called TPU.
For fiscal 2024, the chipmaker expects revenue of approximately $51.0 billion. This is higher than the Zacks Consensus Estimate of $50.54 billion.
Like NVIDIA (NVDA Quick QuoteNVDA – Free report), Broadcom also announced a 10-for-1 stock split, effective July 15. The move will make the stock more accessible to investors and employees and attract individual investors who make small transactions. In effect, a stock split creates more shares of a company without changing the underlying monetary value of an individual investor’s holdings. By increasing the number of shares available, the company can attract new investors who otherwise would not be able to afford a single share at a high price (read: NVIDIA overtakes Apple: ETFs will exploit the incredible growth story).
ETF to exploit
Let’s take a look at each ETF below:
Amplify Cybersecurity ETF (HACK Quick QuoteTO HACK – Free report)
Amplify Cybersecurity ETF is the first cybersecurity ETF that invests in companies in the growing cybersecurity sector. It tracks the Nasdaq ISE Cyber Security Select Index, holding 24 stocks in its basket. Broadcom ranks first with 11.1% of assets.
The Amplify Cybersecurity ETF has amassed $1.6 billion in its asset base and charges 60 basis points in fees annually. It trades an average daily volume of 99,000 shares (read: Cybersecurity ETFs in Focus as Cyber Threats Rise).
Pacer Data and Digital Revolution ETF (TRFK Quick QuoteTRFK – Free report)
The Pacer Data and Digital Revolution ETF aims to provide investors with exposure to globally listed stocks and depositary receipts of data and digital revolution companies. It tracks the Pacer Data Transmission and Communication Revolution Index, holding 79 stocks in its basket. Broadcom is in third place, accounting for 10.3% of assets.
The Pacer Data and Digital Revolution ETF has accumulated $31.2 million in its asset base and charges 60 basis points in annual fees. It trades an average daily volume of 12,000 shares.
Invesco PHLX Semiconductor ETF (SOXQ Quick QuoteSOXQ – Free report)
The Invesco PHLX Semiconductor ETF provides exposure to the largest U.S.-listed securities of companies active in the semiconductor industry. It tracks the PHLX Semiconductor Sector Index, holding 30 stocks in its basket. AVGO occupies the second position with a share of 9.8% in the basket (read: Chip ETFs Focus on Next-Gen AI Product Launches).
The Invesco PHLX Semiconductor ETF has accumulated $437.2 million in its asset base. It charges 19 basis points in annual fees and trades an average daily volume of 212,000 shares. The Invesco PHLX Semiconductor ETF has a Zacks ETF Rank #1 (Strong Buy).
iShares US Tech Independence Focused ETF (IETC Quick QuoteCIET – Free report)
The iShares US Tech Independence Focused ETF is an actively managed ETF providing exposure to US companies with a greater proportion of US technology, revenue and production capabilities. It holds 151 stocks in its basket, with Broadcom occupying third position with 9.8% of assets.
The iShares US Tech Independence Focused ETF has accumulated $262.5 million in its asset base and trades a light volume of 27,000 shares. It charges 18 basis points in annual fees.
First Trust NASDAQ Technology Dividend Index Fund (TDIV Quick QuoteIVDD – Free report)
The First Trust NASDAQ Technology Dividend Index Fund provides exposure to dividend payers in the technology sector by tracking the Nasdaq Technology Dividend Index. He has around 87 stocks in his basket. Among these companies, AVGO ranks second, accounting for 8.3% of assets.
The NASDAQ First Trust technology dividend index fund has $2.5 billion in assets and trades in a moderate volume of about 79,000 shares per day. The ETF charges 50 basis points in annual fees.