Yahoo Finance ETFs in Focus Following Oracle's Q4 Earnings
Oracle ORCL reported weak fourth-quarter fiscal 2024 results, missing both earnings and revenue estimates. However, its shares rose more than 9% in after-hour market trading on strong booking and solid revenue outlook for fiscal 2025, indicating robust demand for its AI-powered cloud services.
Investors seeking to tap the strength should consider ETFs having the largest exposure to this software giant. These include Pacer Data and Digital Revolution ETF TRFK, iShares Expanded Tech-Software Sector ETF IGV, Fidelity Cloud Computing ETF FCLD, First Trust Innovation Leaders ETF ILDR and Themes Cloud Computing ETF CLOD.
Oracle Earnings in Focus
The company’s earnings per share were $1.63, missing the Zacks Consensus Estimate by a penny and down from the year-ago earnings of $1.67. Revenues rose 3% year over year to $14.3 billion but fell short of the estimated $14.55 billion (see: all the Technology ETFs here).
Remaining performance obligations, the most popular measure of future contracted sales, jumped 44% to $98 billion in the fourth quarter.
Oracle signed the largest sales contracts in its history in the fiscal third and fourth quarters, driven by enormous demand for training AI large language models in the Oracle Cloud. In the fourth quarter alone, the software maker signed over 30 AI sales contracts totaling more than $12.5 billion, including one with Open AI to train ChatGPT in the Oracle Cloud.
Oracle CEO, Safra Catz expects continued strong AI demand throughout fiscal 2025 to push Oracle sales even higher, resulting in double-digit revenue growth. Growth in each successive quarter is expected to accelerate than the previous quarter as the cloud unit’s capacity begins to catch up with demand. Catz said on the conference call that the cloud infrastructure unit will grow more than 50% in the current fiscal year.
Oracle announced large cloud infrastructure deals with Microsoft MSFT, OpenAI and Google GOOGL to extend its own cloud infrastructure to customers. This will help the software maker to compete better in the business of cloud computing (read: Can Tech ETFs Keep Up Their Winning Momentum?).
The company expects fiscal first-quarter revenue growth of 5-7% and earnings per share in the range of $1.31 to $1.35.
ETFs in Focus
Let us delve into each ETF below:
Pacer Data and Digital Revolution ETF (TRFK)
Pacer Data and Digital Revolution ETF aims to offer investors exposure to globally listed stocks and depositary receipts of data and digital revolution companies. It follows the Pacer Data Transmission and Communication Revolution Index, holding 79 stocks in its basket. Oracle takes the third spot, accounting for 10% of the assets.
Pacer Data and Digital Revolution ETF has accumulated $31 million in its asset base and charges 60 bps in annual fees. It trades in average daily volume of 12,000 shares.
iShares Expanded Tech-Software Sector ETF (IGV)
iShares Expanded Tech-Software Sector ETF provides exposure to software companies in the technology and communication services sectors by tracking the S&P North American Expanded Technology Software Index. It holds a basket of 114 securities, with Oracle taking the second spot at 8.6% of the total assets.
iShares Expanded Tech-Software Sector ETF is popular, with an AUM of $5.8 billion. Its volume is good as it exchanges 4 million shares a day. IGV charges 41 bps in annual fees and has a Zacks ETF Rank #1 (Strong Buy) with a High risk outlook.
Fidelity Cloud Computing ETF (FCLD)
Fidelity Cloud Computing ETF follows the Fidelity Cloud Computing Index, which reflects the performance of a global universe of companies across the market capitalization spectrum that provide products or services enabling the increased adoption of cloud computing, characterized by the delivery of computing services over the Internet. It holds 59 stocks in its basket, with Oracle being the top firm and accounting for a 5.3% share.
Fidelity Cloud Computing ETF has managed assets worth $76.1 million and charges 39 bps in fees per year. It trades in a volume of 21,000 shares a day, on average (read: Time for Cloud ETFs on Earnings Strength & Promising Growth?).
First Trust Innovation Leaders ETF (ILDR)
First Trust Innovation Leaders ETF is an actively managed ETF seeking to offer exposure to companies that may benefit from the development or application of scientific and technological innovation. It holds 63 stocks in its basket with Oracle occupying the fourth position at 5.6% share.
First Trust Innovation Leaders ETF has $29.1 million in its asset base and trades in a paltry volume of about 5,000 shares per day. The ETF charges 76 bps in annual fees.
Themes Cloud Computing ETF (CLOD)
Themes Cloud Computing ETF seeks to track the Solactive Cloud Computing Index, which identifies the largest 50 companies by market capitalization that derive their revenues from digital security, e-commerce infrastructure, data infrastructure, data architecture, Internet infrastructure and data support. It holds 51 stocks in its basket, with Oracle taking the sixth spot at a 4.6% share.
Themes Cloud Computing ETF has $1.3 million in its asset base and trades in a paltry volume of about 1,000 shares per day. The ETF charges 35 bps in annual fees.
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iShares Expanded Tech-Software Sector ETF (IGV): ETF Research Reports
First Trust Innovation Leaders ETF (ILDR): ETF Research Reports
Fidelity Cloud Computing ETF (FCLD): ETF Research Reports
Pacer Data and Digital Revolution ETF (TRFK): ETF Research Reports
Themes Cloud Computing ETF (CLOD): ETF Research Reports
