Core Viewpoint - Shares of Alphabet (GOOGL) increased approximately 6% in pre-market trading following a favorable federal court ruling that overruled severe penalties proposed by the U.S. Department of Justice, allowing Google to retain its Chrome browser and continue its business practices [1][3]. Company Summary - Alphabet (GOOGL) is part of the Zacks Internet - Services industry and holds a Zacks Rank of 3 (Hold). The company has demonstrated strong growth, with a year-to-date gain of about 12% and an increase of approximately 46% since early April [2]. - The recent court ruling is seen as a positive development for Google, as it allows the company to maintain its financial arrangements with Apple and retain control over the Android operating system [4]. Court Decision Details - The federal court ruling prevents Google from being forced to sell Chrome and allows it to continue paying companies to preload its products, although it prohibits exclusive contracts related to payments or licensing [3]. - The ruling permits Google to continue paying Apple billions to remain the default search engine on iPhones, which is a significant aspect of its business strategy [4]. ETFs Exposure - The legal developments are expected to positively impact Alphabet's stock, leading to potential interest in ETFs that have exposure to the company. Several ETFs with notable exposure to GOOGL include: - IShares Global Comm Services ETF, with 14.49% exposure to GOOGL and an asset base of $589.1 million [6]. - Fidelity MSCI Communication Services Index ETF, with 13.90% exposure to GOOGL and an asset base of $1.72 billion [7]. - Vanguard Communication Services ETF, with 13.32% exposure to GOOGL and an asset base of $5.52 billion [8]. - Communication Services Select Sector SPDR Fund, with 12.14% exposure to GOOGL and an asset base of $25.17 billion [10]. - MicroSectors FANG+ ETN, with 10% exposure to GOOGL and an asset base of $490.7 million [11].

Core Insights - Meta Platforms reported better-than-expected Q2 2025 results, with adjusted earnings per share at $7.14, surpassing estimates of $5.83, and a 38% increase year-over-year [2][4] - Revenue grew 22% year-over-year to $47.5 billion, exceeding the estimated $44.84 billion [2][4] - Meta's shares rose 12.1% in after-market trading, reaching new all-time highs due to strong performance in advertising and user growth [1][2] Financial Performance - Adjusted earnings per share of $7.14, up 38% from the previous year [2] - Revenue of $47.5 billion, a 22% increase year-over-year [2] - Projected revenues for Q3 are between $47.5 billion and $50.5 billion [4] User Growth - Global daily active users increased by 6% year-over-year to 3.48 billion across Meta's platforms [4] AI Advancements - Growth attributed to AI advancements in advertising, with over 4 million advertisers using AI-powered Advantage+ campaigns, achieving a 22% improvement in returns [3] - Plans to enable brands to fully create and target ads using AI by the end of 2026 [3] Capital Expenditure - Capital expenditure guidance for 2025 raised to $66-$72 billion, reflecting aggressive investments in AI infrastructure and talent [5] - Significant investments in building large-scale AI data centers, including the Hyperion facility [5] ETF Opportunities - Investors are encouraged to consider ETFs with significant allocations to Meta, including Global X PureCap MSCI Communication Services ETF (GXPC), Vanguard Communication Services ETF (VOX), and others [2][6][7][10][11] - Meta occupies top positions in various ETFs, with share allocations ranging from 18.1% to 28.4% [6][7][10][11]

Core Insights - Alphabet (GOOGL) reported strong Q2 2025 results, exceeding revenue and earnings estimates, and raised its capital expenditures forecast, indicating a focus on AI infrastructure investment [1][3][6] Financial Performance - Earnings per share reached $2.31, surpassing the Zacks Consensus Estimate of $2.15, marking a 22% increase year-over-year [3] - Revenues grew 14% year-over-year to $96.43 billion [3] - Google Cloud revenues increased by 32% year-over-year to $13.62 billion, supported by a partnership with OpenAI [4] - Advertising revenues were $71.34 billion, reflecting a 10.4% year-over-year growth [4] - YouTube revenues rose by 13.8% to $9.8 million during the quarter [4] User Engagement and AI Developments - AI Overviews now reach over 2 billion monthly users, up from 1.5 billion last quarter [5] - The Gemini app, which hosts Google's AI chatbot, has over 450 million monthly active users [5] Investment and Acquisitions - Alphabet is investing heavily in AI talent, acquiring AI coding startup Windsurf for $2.4 billion [6] - The capital expenditures forecast was raised to $85 billion for the year, an increase of $10 billion from February [6] ETFs with Exposure to Alphabet - Roundhill Magnificent Seven ETF (MAGS) has a 15.3% allocation to Alphabet and an asset base of $2.4 billion [6] - iShares Global Comm Services ETF (IXP) holds 12.8% of Alphabet, with an asset base of $542.9 million [7] - Fidelity MSCI Communication Services Index ETF (FCOM) has a 12.7% allocation to Alphabet and an asset base of $1.6 billion [8][9] - Vanguard Communication Services ETF (VOX) includes Alphabet at 12.5% and has an asset base of $5.2 billion [10] - Communication Services Select Sector SPDR Fund (XLC) allocates 10.4% to Alphabet and has an asset base of $24 billion [11]

Core Viewpoint - Alphabet's shares have experienced significant volatility in 2025, reflecting broader market trends, with a notable 37% increase in 2024 followed by an 8.9% rise in early 2025, before a sharp decline of around 30% in February due to escalating trade tensions [1][2]. Company Performance - By April 2025, Alphabet's shares rebounded, gaining 17% as of June 2, following easing trade tensions, and the company holds a Zacks Rank 3 (Hold) with a strong Growth Score of A [2]. - The company faces uncertainty due to ongoing antitrust legal proceedings, with the Department of Justice concluding arguments that could have significant implications for Alphabet [3][4]. Legal Challenges - Alphabet lost a landmark antitrust case in August 2024, with a ruling that it illegally monopolized the search engine market, leading to potential drastic consequences for the company [4]. - Analysts predict that if a divestiture of the Chrome browser is ordered, Alphabet's shares could drop by 15% to 25%, and its earnings per share (EPS) could decrease by up to 30% due to Chrome's substantial user base of 4 billion and its contribution of 35% to Alphabet's search revenues [4][5]. Settlement and Compliance - Alphabet has agreed to a $500 million settlement to change its compliance structure as part of a resolution to a shareholder lawsuit alleging antitrust violations, with additional legal fees potentially reaching $80 million [7]. Investment Opportunities - The legal developments surrounding Alphabet are expected to create short-term volatility in its shares, prompting interest in ETFs with significant exposure to the company [8]. - Several ETFs with notable exposure to Alphabet include: - IShares Global Comm Services ETF with 11.97% exposure and an asset base of $415.5 million [9]. - Fidelity MSCI Communication Services Index ETF with 12.50% exposure and an asset base of $1.49 billion [11]. - Vanguard Communication Services ETF with 12.49% exposure and an asset base of $4.74 billion [12]. - MicroSectors FANG+ ETN with 9.74% exposure and an asset base of $445.9 million [13]. - Communication Services Select Sector SPDR Fund with 8.71% exposure and an asset base of $21.82 billion [14].

Key Takeaways Meta Platforms shares surge after it beats estimates for both the top and bottom lines. Earnings per share rose 37% year over year to $6.43 while revenues grew 16% to $42.3 billion. IXP, FCOM, VOX, XLC and WUGI could be exciting picks to tap Meta's growth. 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 ...