WisdomTree U.S. SmallCap Earnings Fund ETF Crosses Below 200 DMA

WisdomTree U.S. SmallCap Earnings Fund ETF (EES) shares have crossed below their 200-day moving average of $52.04, trading as low as $52.03. This represents a 1.2% drop on the day. The 52-week range for EES is $41.9182 to $59.3442.

Meta Platforms Inc. (META) is set to release its second quarter earnings today, which could significantly impact several exchange-traded funds (ETFs), including the WisdomTree U.S. SmallCap Earnings Fund ETF (EES). META’s stock has been in the spotlight due to its expected 11th consecutive revenue beat and analysts’ projections for earnings per share of $5.86 [1].

Impact on ETFs

Several ETFs with substantial exposure to META and the broader AI and tech sectors are likely to experience notable movements following the earnings report. These include the Roundhill Magnificent Seven ETF (MAGS), Invesco QQQ Trust (QQQ), and Communication Services Select Sector SPDR Fund (XLC).

MAGS, which is built to balance the Magnificent Seven U.S. tech giants, has META as one-seventh of its holdings. The fund’s direct exposure to META’s AI investments could make it a first choice for investors seeking AI-enriched tech exposure [1].

QQQ, one of the most liquid and traded ETFs, has META as one of its top 10 holdings, representing more than 3% of the fund. An upbeat Meta report could push QQQ, particularly considering its exposure to other AI leaders such as Microsoft and Nvidia [1].

XLC, which provides exposure to the communication services sector, has META as more than 18% of its weighting. Investors directly wagering on META’s leadership in social media and digital advertising may find XLC an attractive option [1].

Impact on EES

EES shares have crossed below their 200-day moving average of $52.04, trading as low as $52.03, representing a 1.2% drop on the day. The 52-week range for EES is $41.9182 to $59.3442. While EES is not directly exposed to META, the broader market sentiment and potential sector rotation driven by META’s earnings could impact EES.

What to Watch

Investors should keep an eye on META’s 2025 capital spending plans, projected at $64–$72 billion, and possibly increasing further. This full-throated AI buildout could render AI-intensive ETFs more vulnerable to META’s rhythm on monetization and infrastructure return on investment [1].

References

[1] https://www.benzinga.com/etfs/specialty-etfs/25/07/46731965/metas-ai-firepower-could-ignite-magnificent-seven-etfs