Yahoo Finance

The e-commerce behemoth Amazon (AMZN) reported Q1 results after the closing bell on Thursday. Though the company’s guidance for the second quarter was not too great, Q1 beat on both lines and a surging cloud business cheered investors’ mood, sending the shares soaring after hours.

Loss per share came in at 12 cents, a penny higher than the Zacks Consensus Estimate but lower than the year-ago earnings of 23 cents. However, this represents the second beat in a row for Amazon. Revenues climbed 15% year over year to $22.72 billion and came ahead of the Zacks Consensus Estimate of $22.54. Amazon Web Services revenues grew over 45% to $1.57 billion in the quarter.

The company projects revenue growth of 7–18% to $20.6–$22.8 billion for the second quarter, while the Zacks Consensus Estimate of $22.8 billion is at the upper end of the guidance. Amazon also expects an operating loss of $500 million to income of $50 million in the second quarter. Investors should note that the company recorded an operating loss of $15 million in the second quarter of last year.

Market Impact

Shares of AMZN advanced 6.8% after hours yesterday. Investors should note that the stock has gained 25.7% so far this year versus the 2.7% gain for S&P 500 index in the same timeframe. As such, the upward price movement might indicate a turnaround for the company and the earnings beat for two successive quarters point to a bright future.

Further, Amazon has a Zacks Rank #3 (Hold) and a solid industry rank (in the top 38%) at the time of writing as per the Zacks Industry Rank, suggesting upside potential for the stock in the coming days. Investors seeking a play on this turnaround story might look to ETFs having a higher allocation to this Internet giant. Below we have highlighted some of these that would be in focus in the coming days:

Market Vectors Retail ETF (RTH)

This fund provides exposure to the 26 largest retail firms by tracking the Market Vectors U.S. Listed Retail 25 Index. Of these, AMZN takes the second position in the basket with 8.90% share. The ETF has a certain tilt toward specialty retail, which accounts for 31% share while hypermarkets (14%), drug stores (13%) and department stores (12%) round off to the next three spots (read: A Beginner's Guide to Retail ETFs).

The product has amassed $346.1 million in its asset base and charges 35 bps in annual fees. Volume is moderate as it exchanges nearly 100,000 shares per day. RTH has added over 7% in the year-to-date time frame. RTH has a Zacks ETF Rank #1 (Strong Buy) with a moderate risk outlook (read: Consumer ETFs Hold Head High After Wage Hike).

First Trust Dow Jones Internet Index (FDN)

This is one of the most popular and liquid ETFs in the broad tech space with AUM of over $2.7 billion and average daily volume of more than 300,000 shares. The fund tracks the Dow Jones Internet Composite Index and charges 57 bps in fees per year.

In total, the fund holds 42 stocks with Amazon taking the second spot at 8.91%. From an industry look, Internet mobile applications account for about three-fifths of the portfolio while Internet retail makes up for 25%. The ETF has added about 10% so far this year. The fund has a Zacks ETF Rank #3 (Hold) with a High risk outlook (read: ETFs to Watch on Facebook's Q1 Disappointment).

PowerShares Nasdaq Internet Portfolio (PNQI)

This fund follows the Nasdaq Internet Index, giving investors exposure to the broad Internet industry. The fund holds about 99 stocks in its basket with AUM of $247.4 million while charging 60 bps in fees per year. It trades in light volume of around 40,000 shares a day (see: all the Technology ETFs here).

Once again, Amazon occupies the second position with a 7.83% allocation. In terms of industrial exposure, Internet mobile applications make up over 60% of the basket, followed by Internet retail (34%). PNQI is up over 10% in the year-to-date timeframe. The fund has a Zacks ETF Rank #3 with a High risk outlook.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
AMAZON.COM INC (AMZN): Free Stock Analysis Report
 
MKT VEC-RETAIL (RTH): ETF Research Reports
 
FT-DJ INTRNT IX (FDN): ETF Research Reports
 
PWRSH-ND INTRNT (PNQI): ETF Research Reports
 
To read this article on Zacks.com click here.
 
Zacks Investment Research
 
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report