Apple Inc.’s Impact On The Technology ETF (Nasdaq:QQQQ),(Nasdaq:AAPL)

“Serial earnings beater Apple Inc. (Nasdaq:AAPL) reports after the bell today and shares could use another shot of the earnings magic the company has displayed over the past year. PowerShares QQQ (Nasdaq:QQQQ) is the ETF to play a rebound in Apple (Nasdaq:AAPL) shares if that indeed takes place. Apple’s stock has declined for more than a week due to reception problems with their new iPhone. When left-handed users are holding the phone, the natural placement of their hand can cause it to lose reception and drop calls,” Don Dion Reports From The Street.

Dion goes on to say, “Apple’s response was ham-handed, at first saying the problem was software related, then acknowledging it was an antenna malfunction. Last week, the company said it would supply free phone cases for customers having issues with existing phones, as well as offer rebates for consumers who want them. The company is working to correct the problem permanently for new phones. The hit to shares derailed the otherwise steady performance of Apple stock. Since announcing earnings in late April, shares had climbed as much as 10% by late June, compared to a 10% decline in the S&P 500 Index. As the reception problems became widely known, Apple’s gains evaporated and it now has a slight loss since April 20.”

“Since the reception problems didn’t become big news until July, earnings are unlikely to have suffered in the previous quarter. The consensus estimate has been rising steadily over time, up 15% in the past three months and 1% in the past week. Estimates for the current quarter and the next year are also moving higher, suggesting that analysts don’t see a hit from the antenna problems. Analysts expect earnings were $3.10 per share in the previous quarter. Given recent history, values closer to $4 per share are more likely. I expect we’ll also learn that Apple customers are loyal to the company, and long-term earnings have not been damaged by the antenna issue. With shares down about 10% in the past month and falling for the past six trading days, it sets up a good buy point for bullish investors,” Dion Reports.

PowerShares QQQ (Nasdaq:QQQQ) has the greatest exposure to Apple (Nasdaq:AAPL) of any ETF, at 19% of assets. This heavily overweight position makes it the best choice for a technology ETF during a period of Apple’s outperformance.

Here is a closer look at the PowerShares QQQ Trust ETF (NASDAQ:QQQQ) below:

PowerShares QQQ Trust ETF (NASDAQ:QQQQ) Visit Our (QQQQ) Category: HERE

The investment is a unit investment trust designed to correspond generally to the performance, before fees and expenses, of the Nasdaq-100 index. The fund holds all the stocks in the Nasdaq-100 index, which consists of the largest non-financial securities listed on the Nasdaq Stock Market. The fund issues and redeems shares of Nasdaq-100 Index Tracking Stock in multiples of 50,000 in exchange for the stocks in the Nasdaq-100 and cash.

Fund Holdings subject to change  
Apple Inc.   18.64%  
Microsoft Corp.   4.55%  
QUALCOMM Inc.   4.35%  
Google Inc. (Cl A)   4.16%  
Oracle Corp.   2.96%  
As of 7/19/2010      
 
 
Cisco Systems Inc.   2.77%  
Intel Corp.   2.52%  
Teva Pharmaceutical Industries Ltd. ADS   2.41%  
Amazon.com Inc.   2.12%  
Research In Motion Ltd.   1.81%  

Chart forPowerShares QQQ (QQQQ)

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