iShares Global Comm Services ETF

IXP

Market cap $685M

IXP and XLC are two perfectly acceptable ETF's for investing in the overall Communications Services sector. The sector performance has been very good and the outlook remains attractive. IXP has a global focus, while XLC only holds equity in the companies in from the S&P 500. ETFs provide ease-of-use and instant diversification, but they have disadvantages as well.

The Investment Committee share their top stocks to watch for the second half.

Wednesday, July 23 came and went with another spate of earnings to report. While the still-hot theme of artificial intelligence (AI) living through big tech earnings may grab headlines, the communications sector specifically may also speak to investors.

Press Release Nokia upgrades ESpanix's IXP infrastructure to reduce energy consumption and complexity First 400G IXP network in Spain. Solution reduces complexity, lowers costs, and consumes less power than bonded 100G connections.

Press releaseNokia and NL-ix deploy Deepfield for the largest IXP-based anti-DDoS protection for enterprises across Europe A breakthrough case where an Internet Exchange Point (IXP) deploys a pan-European anti-DDoS solution Improved DDoS protection would result in less or zero downtime for enterprises and other customers of the service 16 September 2024 Espoo, Finland – Nokia and NL-ix today announced the deployment of Nokia Deepfield Defender across NL-ix's network, making it the biggest anti-DDoS solution for an internet exchange point (IXP) environment rolled out across Europe to better protect customers and operations by stopping DDoS attacks in seconds. Utilized in the NL-ix network, Nokia Deepfield Defender detects DDoS using AI-driven big data analytics and drives mitigation directly on the Nokia FP5-based routers, which NL-ix is deploying across their entire network.

IXP has significant concentration risk with Meta Platforms and Alphabet making up 42.6% of its portfolio, making it vulnerable to poor financial reports from these companies. The fund's performance is heavily dependent on digital advertising spending, which, while growing, is decelerating, potentially impacting future returns. Despite an attractive valuation with a weighted average forward P/E ratio of 17.2x, IXP's slow growth profile makes it less appealing for long-term investors.

On Apr 26, 2024, Google-parent Alphabet (GOOGL) officially joined the prestigious $2 trillion club. There are more room for growth.

Look into ETFs with heavy exposure to Alphabet as the tech giant reports better-than-expected first-quarter 2024 results and also announces a cash dividend with plans to uphold a quarterly cash dividend distribution policy.

Meta Platforms (META) beat on both the top and bottom lines but falters on weak revenue and higher spending forecast.

Meta Platforms (META) has a strong chance of beating estimates on earnings and saw positive earnings revision activity, which is generally a precursor to an earnings beat.