ETFs in Spotlight as META Shares Rally 10% Post Q4 Earnings Beat

Shares of Meta Platforms META jumped 10.4% at the bourses yesterday, following the company’s better-than-expected fourth-quarter 2025 results. The Facebook-owner also issued better-than-expected sales and capital expenditure guidance, which must have contributed to investor optimism in this stock and thus got duly reflected in its double-digit share price hike. 

Considering such an upbeat outlook, investors might feel excited to grab more shares of META right away. However, some may remain concerned about the company’s Reality Labs unit, which reported an operating loss of $6.02 billion, exceeding analysts’ projection of $5.67 billion (as mentioned by CNBC). 

With META’s management expecting the Reality Labs unit to incur similar losses this year, and with regulatory headwinds in the European Union and the United States that could potentially lead to material business losses, some investors may remain skeptical about adding the stock to their portfolios.

While this slump may disappoint investors, it could be short-lived, given the company’s upbeat guidance for the final quarter of the year. In fact, investors interested in this stock might view the current dip as a golden opportunity to buy in and potentially profit later. 

Therefore, for investors who would like to gain from META’s surge, yet don’t want to be exposed to the unique regulatory and single-stock volatility that META carries, a more prudent strategy could be to consider exchange-traded funds (ETFs) with significant exposure to Meta Platforms. This approach allows investors to capture potential upside while mitigating company-specific risks that could severely impact profits during times of unprecedented crisis.

But before diving straight into these ETFs, let us check Meta’s overall performance in the fourth quarter, in terms of other metrics.

A Brief Analysis of META’s Q4 Results

META’s earnings of $8.88 per share comfortably surpassed the Zacks Consensus Estimate of $8.21, while revenues of $59.89 billion beat the consensus mark by $1.3 million. On a year-over-year basis, both earnings and revenues improved at double-digit rates.

The company ended the fourth quarter with 6% year-over-year growth in employees, driven by hiring in priority areas of monetization, infrastructure, Meta Superintelligence Labs as well as regulation and compliance.

In terms of innovation, META launched a new run-time model across Instagram Feed stories and reels, which resulted in a 3% increase in conversion rates in the fourth quarter. It also doubled the number of GPUs used to train its GEM model for ads ranking, in addition to adopting a new sequence learning model architecture. The combined GEM and sequence-learning improvements drove a 3.5% increase in ad clicks on Facebook and more than 1% gain in conversions on Instagram in the fourth quarter.

Looking ahead, META projects to generate revenues in the range of $53.5-$56.5 billion in the first quarter of 2026. This revenue projection by META is quite higher than the consensus estimate of $51.38 billion. Its 2026 capital expenditure projection also remains robust in the range of $115-$135 billion, driven by increased investment to support Meta Superintelligence Labs efforts and its core business.

Further, META’s management expects its ongoing investments to drive additional gains in 2026 as the company continues to integrate AI across all layers of the marketing and customer engagement funnel.

META-Heavy ETFs to Watch

iShares Global Comm Services ETF IXP

This fund, with net assets worth $739.8 million, offers exposure to 68 companies that provide media, entertainment, social media, search engine, video/gaming and telecommunication services. Of these, META carries the first spot, holding 22.65% of the fund. The fund holds both Alphabet Class A GOOGL and Class C GOOG shares, which occupy the second and third spots, respectively. When combined, Alphabet represents over 23.09% of the fund’s total weight. 

IXP has surged 21.8% over the past year. The fund charges 40 basis points (bps) as fees.  It traded at a volume of 0.05 million shares in the last trading session. 

Vanguard Communication Services ETF VOX

This fund, with net assets worth $6.3 billion, offers exposure to 119 U.S. companies within the communication services sector. Of these, META carries the first spot, holding 23.12% of the fund. Alphabet’s two share classes hold the second and third spots in this fund, with a combined weightage of 23.56%.

VOX has rallied 20.7% over the past year. The fund charges 9 bps as fees. It traded at a volume of 0.26 million shares in the last trading session. 

Communication Services Select Sector SPDR ETF XLC

This fund, with assets under management (AUM) worth $27.74 billion, offers exposure to 23 companies from the telecommunication services, media, entertainment and interactive media & services industries. Of these, META carries the first spot, holding 20.26% of the fund. Alphabet’s two share classes hold the first and second spot in this fund, with a combined weightage of 20.80%.

XLC has gained 17.5% over the past year. The fund charges 8 bps as fees. It traded at a volume of 9.73 million shares in the last trading session.

Global X PureCap MSCI Communication Services ETF GXPC

This fund, with net assets worth $88.9 million, offers exposure to 26 U.S. companies in the communication services sector. Of these, META carries the third spot, holding 23.21% of the fund. Alphabet’s two share classes hold the first and second spots in this fund, with a combined weightage of 53.31%.

GXPC has soared 25.8% over the past year. The fund charges 15 bps as fees. It traded at a volume of 0.06 million shares in the last trading session. 


 

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

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