To The Moon

🌟🌟🌟The Communications Services Sector has posted strong results since 2023 thanks to recovering earnings and enthusiasm on AI.  As a result $Fidelity MSCI Communication Services Index ETF(FCOM)$ has risen 2.8% in the past 5 days and it is now up 20% year todate.  In 2023 FCOM has jumped 32%.

FCOM represents the best and strongest US companies in the Communications sector.  These include both telecommunications, the media and entertainment industry.

The Top 10 holdings include $Meta Platforms, Inc.(META)$  $Alphabet(GOOG)$  Verizon Communications, $Netflix(NFLX)$  $Walt Disney(DIS)$ , Comcast Corp, AT&T, T Mobile and Trade Desk.

Meta Platforms takes up a huge 23.5% and is the top holding in FCOM, followed by Alphabet Class A at 12.5%, and Alphabet Class C at 9.6%.  The Top 10 holdings represent a massive 71% of FCOM.  Total number of holdings is 108.

FCOM has the lowest Expense ratio of 0.08% compared to other competing ETFs and is the 3rd largest Communications ETF with Assets Under Management of USD 1.16 billion.

The current distribution yield is 0.82% paid every 3 months. 

Meta Platforms has reached the Trillion Dollar Club after its profit tripled in Q4 23 and it issued its first ever dividend.  Revenue rose 25% in the quarter for Meta Platforms, marking the fastest rate of growth since mid 2021 as online ad market rebounded.

Meta Platforms is also into AI with Meta AI built with Llama 3.  Meta AI is a free virtual assistant which is now incorporated in the default search bar in Facebook, Instagram, Messenger and WhatsApp.

When it comes to Social Media, Meta Platforms is the leader as it owns 4 of the biggest social media platforms - Facebook, WhatsApp, Facebook Messenger and Instagram.  All these social media platforms have more than 1 billion monthly active users each. 

Google is also every much into AI with Gemini which is  a Generative AI chatbot developed by Google.    However Google 's forte is its Search Engine with 92% market share. 

Google has reached its all time high at USD 192.86 with USD 2. 34 Trillion in market cap this year.    Advertising accounts for majority of Google' s revenue.  Google Cloud Platform is the 3rd biggest cloud provider behind Amazon Web service and Microsoft Azure.

Netflix is the biggest player in the video streaming space with over 260 million subscribers as of 2024.  In contrast Disney has 157 million subscribers and Amazon Prime Video had over 117 million subscribers.

Disney is one of the largest entertainment companies in the world with its theme parks, movies, TV shows, music and even cruise ships. 

I am bullish on FCOM ETF as I believe that it has exponential growth ahead.  Digital Advertising has rebounded and AI is still at its nascent stage.    Big communication companies such as Meta Platforms, Google are at the forefront of the AI  revolution.   The success of Digital Advertising has come from machine learning.  These use data and algorithms to optimise recommendations for contents and ads to show.

Exciting times are ahead for the communications sector as it is well positioned to play a crucial role in the future of AI.  FCOM represents the best of these communications companies. 

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