5 ETFs To Watch During Microsoft's Post-Earnings Drop

Microsoft's (MSFT) recent earnings report sparked a 6% drop in its stock price, raising concerns about slowing cloud growth and a downbeat revenue outlook. This decline has investors eyeing ETFs with substantial allocations to the software giant. Here are five ETFs to watch during Microsoft's post-earnings drop:



1. MSCI Information Technology Index ETF (NYSE:FTEC)
FTEC tracks the MSCI USA IMI Information Technology Index and has Microsoft as its second-largest holding at 16.5%. With a broad exposure to the tech sector, FTEC could benefit from a general rebound in tech stocks, amplifying the impact of Microsoft's potential recovery.



2. Vanguard Information Technology ETF (NYSE:VGT)
VGT provides exposure to the information technology sector of the U.S. equity market, with Microsoft accounting for about 16.65% of total holdings. Similar to FTEC, VGT's sector-specific focus and Microsoft's significant weight mean it could benefit from a rebound in Microsoft's stock price.



3. T-Rex 2X Long Microsoft Daily Target ETF (BATS:MSFX)
MSFX seeks to magnify (200%) the daily performance of Microsoft stock. A rebound in Microsoft's stock price would directly translate into a significant gain for MSFX, making it an ideal choice for investors looking to capitalize on a Microsoft rebound.



4. iShares U.S. Technology ETF (NYSE:IYW)
IYW provides exposure to U.S. electronics, computer software and hardware, and informational technology companies, with Microsoft holding the second-largest position at 15.15%. A rebound in Microsoft's stock price would directly benefit IYW, but its market-cap-weighted approach may limit its upside potential compared to sector-specific ETFs.



5. SPDR Select Sector Fund – Technology (NYSE:XLK)
XLK is a market-cap-weighted ETF that focuses on the technology sector, with Microsoft being the largest holding at 21.5%. A rebound in Microsoft's stock price would directly benefit XLK, but its broader exposure to the tech sector means it could also be influenced by the performance of other tech stocks, potentially diluting the impact of Microsoft's rebound.



In conclusion, investors should closely monitor these five ETFs during Microsoft's post-earnings drop, as they have substantial allocations to the software giant and could benefit from a rebound in Microsoft's stock price. By staying informed about market conditions, sector-specific risks, and regulatory developments, investors can make more informed investment decisions and better manage the risks associated with these ETFs.