Amazon Q2 Earnings Disappoint: ETFs In Focus

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After the closing bell on Thursday, Amazon (AMZN - Free Report) posted dismal results for Q2. The e-commerce giant missed revenue estimates for the first time in three quarters and offered weak third-quarter guidance though it beat on the bottom line.

Earnings per share came in at $15.12, easily surpassing the Zacks Consensus Estimate of $12.22 and improving from the year-ago earnings of $10.30. Revenues climbed 27% year over year to $113 billion but fell short of the consensus estimate of $115.1 billion. The company topped $100 billion in revenues for the third consecutive quarter but sales growth slowed from 41% growth reported in the year-ago quarter.

In particular, revenues from the cloud computing business — Amazon Web Services (AWS) — surged 37% year over year to $14.8 billion. This growth rate is higher than 32% growth reported in Q1 and 29% growth seen in Q2 of 2020.

Amazon expects sales growth to continue slowing in Q3. The e-commerce giant offered a downbeat revenue guidance of $106-$112 billion for the third quarter, suggesting 10-16% year-over-year growth. The high end of the range is well below the current Zacks Consensus Estimate of $119.25 billion, which indicates 24% growth.

Market Impact

Following the disappointing results, AMZN shares dropped more than 7% in aftermarket hours on elevated volume. The stock currently has a Zacks Rank #3 (Hold) and Growth Score of A, suggesting that Amazon is primed for growth.

Given this, ETFs with the highest allocation to this Internet giant will be in focus in the days ahead. Below we have highlighted five of them:

ProShares Online Retail ETF (ONLN - Free Report)

This is the first ETF focused exclusively on retailers that principally sell online or through other non-store channels. It follows the ProShares Online Retail Index, holding 25 stocks in its basket. Amazon is the top firm accounting for 24.1% of the portfolio. The product has amassed $1 billion in its asset base and currently trades in a moderate volume of around 78,000 shares a day on average. It charges 58 bps in annual fees from investors.

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