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Like other tech giants such as Microsoft (MSFT), Meta Platform (META), and Google’s parent, Alphabet (GOOGL), Amazon (AMZN - Free Report) also failed to impress investors with its second-quarter 2024 results. The online behemoth outpaced earnings estimates but lagged on revenues. It also guided weaker-than-expected revenues for the ongoing quarter.

Shares of AMZN dropped as much as 8% in aftermarket hours on elevated volume. ETFs having a substantial allocation to this online behemoth have been in focus. These include ProShares Online Retail ETF (ONLN - Free Report), Fidelity MSCI Consumer Discretionary Index ETF (FDIS - Free Report), Vanguard Consumer Discretionary ETF (VCR - Free Report), Consumer Discretionary Select Sector SPDR Fund (XLY - Free Report) and VanEck Vectors Retail ETF (RTH - Free Report).

The e-commerce giant reported earnings per share of $1.26, outpacing the Zacks Consensus Estimate of $1.05 and the year-ago earnings of 63 cents. Revenues grew 10% year over year to a record high of $148 billion but fell short of the consensus estimate of $148.6 billion. New generative AI features in its cloud and e-commerce businesses spurred robust growth.

Amazon’s cloud computing business — Amazon Web Services (“AWS”) — revenues soared 19% year over year to $26.3 billion. Advertising revenues grew 12% year over year to $12.8 billion.

Like other tech companies, Amazon has been ramping up investments in data centers, chips and the power needed for AI workloads. The world's largest online retailer expects revenues in the range of $154-$158.5 billion for the third quarter of 2024. The Zacks Consensus Estimate is pegged at $158.17 billion.

ETFs to Buy
 

ProShares Online Retail ETF

ProShares Online Retail ETF offers exposure to companies that principally sell online or through other non-store channels and then zeros in on the companies that reshape the retail space. It tracks the ProShares Online Retail Index, holding 19 stocks in its basket. Amazon is the top firm, accounting for 24.5% of the portfolio.

ProShares Online Retail ETF has amassed $87.7 million in its asset base and currently trades in a moderate volume of around 15,000 shares a day on average. It charges 58 bps in annual fees from investors. 

Fidelity MSCI Consumer Discretionary Index ETF

Fidelity MSCI Consumer Discretionary Index ETF tracks the MSCI USA IMI Consumer Discretionary Index, holding 274 stocks in its basket. Of these, Amazon takes the top spot with a 23.3% share. 

Fidelity MSCI Consumer Discretionary Index ETF has amassed $1.6 billion in its asset base while trading in a good volume of around 127,000 shares a day on average. It charges 8 bps in annual fees from investors and currently has a Zacks ETF Rank #3 (Hold) with a Medium risk outlook.

Vanguard Consumer Discretionary ETF

Vanguard Consumer Discretionary ETF currently follows the MSCI US Investable Market Consumer Discretionary 25/50 Index and holds 304 stocks in its basket. Of these, Amazon occupies the top position, with a 23.4% allocation. Broadline Retail takes the largest share at 26.1%, while automobile manufacturers, restaurants and home improvement retail round off the next three spots. 

VCR charges investors 10 bps in annual fees, while volume is moderate at nearly 53,000 shares a day. The product has managed about $5.6 billion in its asset base and currently carries a Zacks ETF Rank #3 with a Medium risk outlook.

Consumer Discretionary Select Sector SPDR Fund

Consumer Discretionary Select Sector SPDR Fund offers exposure to the broad consumer discretionary space by tracking the Consumer Discretionary Select Sector Index. It is the largest and most popular product in this space, with AUM of nearly $19 billion and an average daily volume of around 3 million shares. Holding 52 securities in its basket, Amazon takes the top spot with 22.2% of assets. Specialty retail, broadline retail, hotels, restaurants & leisure, and automobiles are the top four sectors with double-digit exposure each. 

Consumer Discretionary Select Sector SPDR Fund charges 9 bps in annual fees and has a Zacks ETF Rank #3 with a Medium risk outlook.

VanEck Vectors Retail ETF

VanEck Vectors Retail ETF provides exposure to the 26 largest retail firms by tracking the MVIS US Listed Retail 25 Index, which measures the performance of the companies involved in retail distribution, wholesalers, online, direct mail and TV retailers, multi-line retailers, specialty retailers and food and other staples retailers. Amazon takes the top position in the basket with a 19.6% share.

VanEck Vectors Retail ETF has amassed $211.1 million in its asset base and charges 35 bps in annual fees. It trades in a lower volume of 4,000 shares a day on average. VanEck Vectors Retail ETF has a Zacks ETF Rank #2 (Buy) with a Medium risk outlook.

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