ETFs to Buy as Microsoft Nears $4T Mark Post Blowout Q4 Earnings

Microsoft (MSFT) spread optimism on Wall Street after reporting blowout fourth-quarter fiscal 2025 results. It beat earnings and revenue estimates, driven by its cloud computing and artificial intelligence businesses. The company also offered strong guidance. MSFT shares jumped 8.7% in after-market hours, putting the company on track to join NVIDIA (NVDA) in the $4 trillion market cap club (see: all the Technology ETFs here).

Investors should tap Microsoft's growth with ETFs having double-digit exposure to the software leader. These include T-Rex 2X Long Microsoft Daily Target ETF (MSFX), Global X PureCap MSCI Information Technology ETF (GXPT), iShares Global Tech ETF (IXN), iShares Dow Jones US Technology ETF (IYW) and Vanguard Information Technology ETF (VGT).

Earnings in Focus

Earnings per share came in at $3.65, which beat the Zacks Consensus Estimate by 30 cents and improved 24% from the year-ago earnings. Revenues grew 18% year over year to $76.4 billion, edging past the consensus estimate of $73.7 billion. Strong demand for Cloud services and AI infrastructure drove the performance.

Intelligent Cloud revenues jumped 26% year over year to $29.9 billion, while Microsoft Cloud revenues rose 27% year over year to $46.7 billion. Sales of Office 365 Commercial and Dynamic 365 climbed 18% and 23%, respectively. Sales of the flagship Azure computing platform grew 39% year over year, beating the company’s target range of 34% to 35%. In the fiscal year, Azure surpassed $75 billion in revenues, up 34% year over year.

Cloud and AI are the driving force of business transformation across every industry and sector, said Microsoft CEO Satya Nadella. The software maker expects revenues of $74.7-$75.8 billion for the fiscal first quarter of 2026. It also expects Azure growth of 37% in constant currency in the fiscal first quarter.

Microsoft is one of the biggest beneficiaries of the AI boom. It has been pouring billions into building its AI infrastructure and expanding its data-center footprint. Microsoft forecasts a record $30 billion in capital spending for the ongoing quarter, its largest ever for a single quarter. This has put the company on track to potentially outspend its rivals over the next year.

ETFs in Focus

T-Rex 2X Long Microsoft Daily Target ETF (MSFX)

T-Rex 2X Long Microsoft Daily Target ETF seeks to magnify (200%) the daily performance of Microsoft stock. It charges 1.05% in annual fees and has accumulated $9.1 million in its asset base (read: Single-Stock ETFs in Focus as Big Tech Earnings Unfold).

Global X PureCap MSCI Information Technology ETF (GXPT)

Global X PureCap MSCI Information Technology ETF seeks to provide uncapped, market capitalization exposure to the Information Technology sector. It follows the MSCI USA Information Technology Index, holding 83 stocks in its basket. Microsoft occupies the second position with a 19.3% share. Global X PureCap MSCI Information Technology ETF has gathered $0.3 million in its asset base since its debut last week. It charges 15 bps in annual fees.

iShares Global Tech ETF (IXN)

iShares Global Tech ETF provides exposure to electronics, computer software and hardware, and information technology companies by tracking the S&P Global 1200 Information Technology 4.5/22.5/45 Capped Index. Holding 120 stocks in its basket, Apple occupies the second spot with a 17.6% share. iShares Global Tech ETF has amassed $5.7 billion in its asset base and trades in a good volume of 132,000 shares a day, on average. The expense ratio is 0.41%.

iShares U.S. Technology ETF (IYW)

iShares U.S. Technology ETF provides exposure to U.S. electronics, computer software and hardware, and information technology companies. It tracks the Russell 1000 Technology RIC 22.5/45 Capped Index, holding 140 securities in its basket. Of these, Microsoft occupies the second position in the basket, with 15.8% of the assets. iShares Dow Jones US Technology ETF has AUM of $22.5 billion and charges 39 bps in fees and expenses. Volume is good as it exchanges nearly 685,000 shares a day. IYW has a Zacks ETF Rank #2 with a Medium risk outlook.

Vanguard Information Technology ETF (VGT)

Vanguard Information Technology ETF manages about $98.3 billion in its asset base and provides exposure to 319 technology stocks. It currently tracks the MSCI US Investable Market Information Technology 25/50 Index. Here, MSFT occupies the second position with a 14.9% share. Vanguard Information Technology ETF has an expense ratio of 0.09%, while volume is solid at nearly 423,000 shares. It has a Zacks ETF Rank #2 with a Medium risk outlook.

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This article originally published on Zacks Investment Research (zacks.com).

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