IBM Soars to New Highs on Q4 Earnings Beat: ETFs to Tap

International Business Machines IBM was the star performer in Thursday's trading session as its shares rallied 13% to hit a new all-time high following robust fourth-quarter 2024 results. The company beat estimates on both earnings and revenues, driven by the strength of its AI business. 

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Investors seeking to ride the rally should focus on ETFs with the highest allocation to this tech giant. These funds are FT Vest DJIA Dogs 10 Target Income ETF DOGG, First Trust NASDAQ Technology Dividend Index Fund TDIV, FT Vest Technology Dividend Target Income ETF TDVI, Invesco Dow Jones Industrial Average Dividend ETF DJD and AXS Green Alpha ETF NXTE.

IBM’s earnings per share came in at $3.92, surpassing the Zacks Consensus Estimate of $3.73 and improving from the year-ago earnings of $3.87. Revenues grew 1% year over year to $17.6 billion and edged past the consensus estimate of $17.5 billion. Consulting revenues were down 2% from the year-ago quarter, while software revenues grew 10%, indicating robust demand for its generative AI products. 

The company said its generative AI book of business grew by almost $2 billion from the prior quarter, adding that clients globally are turning to Big Blue to enhance their enterprises by using AI (see: all the Technology ETFs here).

For 2025, IBM expects revenues to grow at least 5% on a constant currency basis, driven by a strong portfolio mix, operating leverage and yield from productivity initiatives.

ETFs in Focus

FT Vest DJIA Dogs 10 Target Income ETF (DOGG)

FT Vest DJIA Dogs 10 Target Income ETF seeks to provide current income with a secondary objective of providing capital appreciation. It provides exposure to the "Dogs of the Dow," the 10 highest dividend-yielding stocks in the Dow Jones Industrial Average on an annual basis. DOGG holds 17 stocks in its basket, with IBM occupying the top position at 12% share. 

FT Vest DJIA Dogs 10 Target Income ETF has accumulated $27 million in its asset base and trades in a volume of 23,000 shares. It charges 75 bps in fees and expenses. 

First Trust NASDAQ Technology Dividend Index Fund (TDIV)

First Trust NASDAQ Technology Dividend Index Fund provides exposure to dividend payers within the technology and telecommunication sector by tracking the Nasdaq Technology Dividend Index. It charges 50 bps in annual fees and holds about 86 securities in its basket. Of these firms, IBM takes the second spot, making up 8.9% of the assets.

First Trust NASDAQ Technology Dividend Index Fund has amassed $3 billion in its asset base while trading in a volume of around 109,000 shares per day. 

FT Vest Technology Dividend Target Income ETF (TDVI)

FT Vest Technology Dividend Target Income ETF is an actively managed fund that seeks to invest in U.S. securities contained in the Nasdaq Technology Dividend Index and utilize an "option strategy" consisting of writing(selling) call options on the Nasdaq-100 Index and/or the S&P 500 Index, or ETFs that track the Nasdaq-100 Index or the S&P 500 Index. It holds 86 securities in its basket, with IBM taking the second spot at 8.9% share (read: Broadcom Hits $1T Market Cap: Are Broadcom ETFs the Next NVIDIA?). 

FT Vest Technology Dividend Target Income ETF has accumulated $68.8 million in its asset base and trades in a volume of 30,000 shares per day on average. It charges 75 bps in annual fees. 

Invesco Dow Jones Industrial Average Dividend ETF (DJD)

Invesco Dow Jones Industrial Average Dividend ETF offers exposure to dividend-paying companies included in the Dow Jones Industrial Average by their 12-month dividend yield over the prior 12 months. It holds 27 stocks in its basket, with IBM occupying the fourth position, accounting for 6%. 

Invesco Dow Jones Industrial Average Dividend ETF has managed assets worth $335.1 million while trading in a volume of 21,000 shares a day on average. It charges 7 bps in annual fees and has a Zacks ETF Rank #3 (Hold).

AXS Green Alpha ETF (NXTE) 

AXS Green Alpha ETF is an actively managed portfolio seeking long-term capital appreciation. It invests in Next Economy companies selected by Green Alpha Investments for their attractive growth prospects and demonstrates a commitment to promoting a sustainable environment and economy. It holds 59 stocks in its basket, with IBM taking the second spot at 6.2% share.

With AUM of $44 million, AXS Green Alpha ETF charges 100 bps in annual fees from investors and trades in a solid volume of about 6,000 shares a day.

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