State Street Communication Services Select Sector SPDR ETF

XLC

Market cap $23.2B

Comcast Corp. (CMCSA) sent shockwaves through the media landscape with the announcement that it would spin off its media business today. The telecommunications giant will divest its traditional cable television networks, namely NBCUniversal and Sky, into a standalone, publicly traded company.

The proposals include a new act to bolster advanced chip manufacturing and homegrown cloud computing.

When the topic of sector tilts enters the conversation, one sector that might currently be flying under the radar is the communication services sector. Key Takeaways: The communication services sector has not had a breakout performance as of yet this year, but investors may be overlooking the sector's value.

Family offices poured more than $3 billion into tech, media, and telecom companies. But materials attracted the most capital—$4.8 billion.

Disney's earnings beat, streaming momentum and parks growth put ETFs with heavy exposure to the company in focus.

The communication services sector is a concentration bet dressed up as diversification.

Investing in technology is now essential as tech sector earnings and profit margins surge, driven by AI infrastructure capex and data center buildouts. Despite high growth and profitability, the tech sector trades at only a modest premium to the S&P 500, with a PEG ratio of 0.8x. Dividend-focused ETFs like TDIV and TDVI offer exposure to tech's upside while providing income, making them attractive for income-seeking investors.

Communication Services Select Sector SPDR Fund (NYSEARCA:XLC) is down 8.78% year to date, and the two stocks most responsible for that slide are the ones you need to watch most closely over the next 12 months.

State Street Com Svc Sel Sec SPDR ETF is downgraded to hold after a strong rally from April 2025 lows. XLC trades at 17x earnings with a 9.3% long-term growth rate, yielding a PEG just under 2.0x—reasonable but not compelling.

Today's market continues to evolve at a rapid clip. That said, traditional broad market exposure is unable to accurately capture long-term secular trends.