Meta's Q1 Earnings Beat Lifts Shares: ETFs to Buy

After the closing bell on April 30, Facebook’s parent company, Meta Platforms META came up with better-than-expected first-quarter 2025 results, beating estimates on both the top and bottom lines. 

META shares jumped 5.4% in after-market hours on elevated volumes. 

Investors seeking to tap the growth should consider ETFs with a large allocation to this social media giant. These include iShares Global Comm Services ETF IXP, Fidelity MSCI Communication Services Index ETF FCOM, Vanguard Communication Services ETF VOX, Communication Services Select Sector SPDR Fund XLC and AXS Esoterica NextG Economy ETF WUGI.

Earnings in Focus

Adjusted earnings per share came in at $6.43, topping the Zacks Consensus Estimate of $5.22 and increasing 37% from the year-ago quarter. Revenues grew 16% year over year to $42.3 billion and came above the estimated $41.22 billion. 

Meta’s global daily active users on at least one of the family of services (Facebook, WhatsApp, Instagram or Messenger) increased 6% year over year to 3.43 billion as of March. The Meta AI digital assistant now has nearly 1 billion monthly users, up from 700 million monthly users recorded in January.

The company’s Threads microblogging service now has 350 million monthly users, up from 320 million in January. Meta last week said that all “eligible advertisers globally” will be able to run ads on Threads (read: Tariff Relief Talks Lift Tech ETFs, Stocks: What's Ahead?).

Meta continues to boost its capital expenditures and raised its capital expenditure guidance to $64-$72 billion from the previous projection of $60-$65 billion for 2025. The new guidance “reflects additional data center investments to support artificial intelligence efforts as well as an increase in the expected cost of infrastructure hardware.”

The world’s largest social media platform projects revenues in the range of $42.5-$45.5 billion for the second quarter.

ETFs in Focus

iShares Global Comm Services ETF (IXP) 
 
iShares Global Comm Services ETF provides global exposure to companies in media, entertainment, social media, search engine, video/gaming and telecommunication services by tracking the S&P Global 1200 Communication Services 4.5/22.5/45 Capped Index. It holds 68 stocks in its basket, with Meta Platforms taking the top spot at 20.4% share. iShares Global Comm Services ETF has amassed $346.1 million in its asset base while trading at an average daily volume of 40,000 shares. The expense ratio is 0.41%. IXP has a Zacks ETF Rank #3 (Hold) with a Medium risk outlook (see: all the Communication ETFs here).

Fidelity MSCI Communication Services Index ETF (FCOM) 

Fidelity MSCI Communication Services Index ETF follows the MSCI USA IMI Communication Services 25/50 Index. It holds 106 stocks in its basket, with Meta Platforms occupying the top position at 20.5%. Fidelity MSCI Communication Services Index ETF has amassed $1.4 billion in its asset base and trades in an average daily volume of 192,000 shares. It charges 8 bps in annual fees and has a Zacks ETF Rank #3 with a Medium risk outlook.

Vanguard Communication Services ETF (VOX)

Vanguard Communication Services ETF also targets the communication sector by tracking the MSCI US Investable Market Communication Services 25/50 Index. Holding 116 stocks in its basket, Meta Platform takes the top spot with a 20.4% share. Vanguard Communication Services ETF has AUM of $4.2 billion and trades in a good volume of 399,000 shares a day, on average. It charges 9 bps in annual fees and has a Zacks ETF Rank #3 with a Medium risk outlook.

Communication Services Select Sector SPDR Fund (XLC) 

Communication Services Select Sector SPDR Fund offers exposure to companies from telecommunication services, media, entertainment and interactive media & services and has accumulated $20.1 billion in its asset base. It follows the Communication Services Select Sector Index and holds 23 stocks in its basket, with Meta Platforms occupying the top position at 14.7% share. Communication Services Select Sector SPDR Fund charges 8 bps in annual fees and trades in an average daily volume of 7.5 million shares. It has a Zacks ETF Rank #1 (Strong Buy) (read: Netflix Soars to All-Time High: 5 ETFs to Ride the Surge).

AXS Esoterica NextG Economy ETF (WUGI)

AXS Esoterica NextG Economy ETF is an actively managed ETF that invests in stocks of companies that benefit from the ever-evolving digital economy. It holds 34 stocks in the basket, with Meta occupying the top position at 12%. AXS Esoterica NextG Economy ETF has accumulated $29.9 million in its asset base and charges 75 bps in fees per year. It trades in a volume of 2,000 shares a day on average.

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

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