Betting On A Post-Earnings Pop? These ETFs Have Alphabet Written All Over Them
With Alphabet Inc. (NASDAQ:GOOGL) set to report second-quarter earnings after the close today, ETF investors are looking for momentum signs, not only in revenue or profit beats, but in a story reset.
Analysts are forecasting that Google’s parent company will report revenue of $93.72 billion and earnings per share (EPS) of $2.17, both significantly above last year’s second-quarter numbers. If so, it would be the company’s 11th consecutive revenue beat and 10th consecutive EPS surprise, based on figures from Benzinga Pro.
But expectations extend beyond mere numbers this time around. With the stock flat year-to-date and about 11% down from all-time highs, market observers are hoping Alphabet can put regulatory concerns, AI doubt, and increasing CapEx fears behind it, and instead highlight growth in YouTube, Cloud and AI search.
Jay Woods, Chief Global Strategist at Freedom Capital Markets, stated that overall momentum remains skewed to the upside, and a strong earnings report could propel the market toward the $200 level (GOOGL is currently trading at $191.06).
That’s a chance ETF investors are watching.
Also Read: How To Earn $500 A Month From Alphabet Stock Ahead Of Q2 Earnings
ETFs With Alphabet Behind The Wheel
- Vanguard Communication Services ETF (NYSE:VOX): Alphabet is VOX’s second largest holding, accounting for more than 12% of the portfolio. If YouTube and Google Search are strong, this sector-specific ETF will be a winner. VOX has picked up in recent times as investors wagered on ad-streaming, subscription services, and digital media bouncing back, all niches where Alphabet is a dominant force. The fund is up almost 11% so far this year.
- Fidelity MSCI Communication Services ETF (NYSE:FCOM): A mirror of VOX in several respects, FCOM is another Alphabet-dominant fund (with an allocation of almost 13%) and offers more affordable exposure to the communications sector. It has been a favorite for those who wish to participate in Google’s media, mobile and AI plays without choosing individual stocks.
- Invesco QQQ Trust (NASDAQ:QQQ): The Nasdaq-100 behemoth tends to be the first to respond to Big Tech reports, and Alphabet’s report is no different. Alphabet, being in a top-10 position in the QQQ, can influence sentiment across the tech-heavy index, particularly if cloud and AI storylines gain momentum.
- iShares U.S. Technology ETF (NYSE:IYW): Though Alphabet is a communication services classification, its growing footprint in AI and cloud computes it increasing influence among tech-bias funds such as IYW. A stronger-than-expected performance might drive this ETF’s current rally, especially as investors reinvest in AI-exposed large-cap stocks.
The AI Laggard-To-Leader Pivot?
A few analysts believe Alphabet’s Q2 might be a pivot point as the market’s perception of its AI role shifts.
Raymond James analyst Josh Beck had an Outperform rating and a $185 price target going into the earnings release. “Bigger picture, we see the narrative potential shifting from AI Laggard to AI Leader and recommend long positions into GOOG and believe a few insightful comments from the management team,” Beck said, citing strength in search, cloud momentum, and cost discipline on AI infrastructure.
Beck also pointed out that Alphabet’s 17.8x forward P/E ratio is at a discount to technology peers such as Meta (NASDAQ:META), Nvidia (NASDAQ:NVDA), and Apple (NASDAQ:AAPL), implying upside for re-rating.
The firm’s “Made By Google 2025” event on August 20 may further fuel the bull case. Planned to introduce new Pixel phones, a refreshed Pixel Watch, and enhanced AI integration into Android, the event may further solidify Alphabet’s shift toward next-generation search and AI-first products.
All in all, still a good time for ETF investors to take advantage of the possible surge.
Last Word: ETFs Set For Action
As Alphabet’s results serve as a bellwether for overall tech sentiment, Tuesday’s earnings announcement has the potential to set off a domino effect across ETFs, particularly those front-loaded in communication services and large-cap growth.
In brief, this is not a mere earnings report. It’s a challenge to see if Alphabet can still search for momentum, and discover it.
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