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Investing in Amazon Stock Post Q2 Dip: Two ETF Options to Consider
ByAinvest
Friday, Aug 1, 2025 4:30 pm ET1min read
Amazon's Q2 earnings beat expectations, but a cautious Q3 outlook sent shares down 8%. Investors looking for exposure to Amazon stock may consider Fidelity MSCI Consumer Discretionary Index ETF (FDIS) and Consumer Discretionary Select Sector SPDR Fund (XLY), which offer diversified exposure to Amazon and other major consumer discretionary stocks. Both ETFs have moderate buy ratings and offer upside potential.
Amazon (AMZN) reported stronger-than-expected second-quarter 2025 results, outpacing earnings and revenue estimates. The e-commerce giant reported earnings per share (EPS) of $1.68, surpassing the Zacks Consensus Estimate of $1.33 and the year-ago earnings of $1.23. Revenues grew 13% year over year to $167.7 billion, edging past the consensus estimate of $162.3 billion [1].Amazon's advertising business was its fastest-growing division in the quarter, with ad revenues increasing 23% year over year to $15.69 billion. Online store sales grew 11% to $61.48 billion, while Amazon's cloud computing business, Amazon Web Services (AWS), revenues soared 17.5% year over year to $30.9 billion [1].
However, the company's muted third-quarter operating income guidance spooked investors. The guidance, which expects revenues in the range of $174-$179.5 billion and operating income of $15.5-$20.5 billion, fell below analysts' expectations. This has put ETFs with a substantial allocation to Amazon in focus [1].
Investors seeking exposure to Amazon stock may consider the Fidelity MSCI Consumer Discretionary Index ETF (FDIS) and the Consumer Discretionary Select Sector SPDR Fund (XLY). Both ETFs offer diversified exposure to Amazon and other major consumer discretionary stocks. FDIS holds 259 stocks in its basket, with Amazon taking the top spot with a 24.2% share, while XLY, the largest and most popular product in this space, holds 51 securities in its basket, with Amazon taking the top spot with 24.4% of the assets [1].
Both ETFs have moderate buy ratings and offer upside potential. FDIS charges 8 bps in annual fees, while XLY charges 8 bps in annual fees. The volume of shares traded daily for FDIS is around 86,000, and for XLY, it is around 5.1 million [1].
References:
[1] https://www.tradingview.com/news/zacks:3c6a80c37094b:0-amazon-q2-earnings-beat-estimates-shares-dip-etfs-in-focus/
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