Following Microsoft’s MSFT second-quarter fiscal 2025 earnings report, ETFs with substantial allocations to the software giant have come into the spotlight.

Despite Microsoft beating earnings and revenue estimates, concerns over slowing cloud growth led to a sharp 6% drop in the company’s shares at market close on Jan. 30. However, the stock has slightly pared the loss as of writing on Jan. 31. Investors are now carefully looking at ETFs heavily weighted in Microsoft to assess potential market implications.

Several ETFs with double-digit exposure to Microsoft have gained attention. Some of the most prominent funds include:

MSCI Information Technology Index ETF FTEC

• Tracks the MSCI USA IMI Information Technology Index.

• Microsoft holds a 16.5% allocation.

• AUM stands at $11.47 billion.

• Charges an expense ratio of 0.08%.

Vanguard Information Technology ETF VGT

• Provides exposure to the information technology sector of the U.S. equity market.

• Microsoft accounts for about 16.65% of total holdings.

• AUM stands at $74.4 billion.

• Charges an expense ratio of 0.10%.

T-Rex 2X Long Microsoft Daily Target ETF MSFX

• Seeks to amplify Microsoft’s daily performance by 200%.

• Charges 1.05% in annual fees.

• Has an asset base of $7.22 million

iShares U.S. Technology ETF IYW

• Provides exposure to U.S. electronics, software and hardware companies. Microsoft holds the second-largest position at 15.15%.

• Tracks the Russell 1000 Technology RIC 22.5/45 Capped Index.

• Assets under management (AUM) stand at $18.27 billion.

• Charges 0.4% in fees.

SPDR Select Sector Fund – Technology XLK

• Microsoft holds 21.5% position among its components.

• Charges an expense ratio of 0.09%.

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Microsoft’s Q2 Earnings Highlights

Microsoft reported earnings per share of $3.23, surpassing the $3.11 consensus estimate and improving from the prior-year earnings of $2.93 per share. Revenue climbed 12% year-over-year to $69.6 billion, slightly ahead of the consensus estimate of $68.70 billion.

Revenue from the Intelligent Cloud segment rose 19% year-over-year to $25.54 billion, with Office 365 Commercial and Dynamics 365 registering sales growth of 16% and 19%, respectively. The Azure cloud computing platform reported a 31% year-over-year revenue increase, marking a slowdown from 33% in the previous quarter.

Despite exceeding Wall Street expectations in the second quarter, Microsoft’s forecast for slower cloud growth raised concerns among investors, leading to a post-earnings decline in its stock price.

It is important to note that Microsoft has guided revenue growth across key segments for the fiscal third quarter. The company expects:

• Productivity and Business Processes revenue between $29.4 billion and $29.7 billion, an 11%-12% growth (constant currency) year-over-year.

• Office Consumer and Cloud Services are anticipated to grow in the mid-to-high single digits, LinkedIn in the low-to-mid single digits, and Dynamics in the mid-teens.

• Intelligent Cloud revenue is forecasted between $25.9 billion and $26.2 billion, with Azure growing 31%-32% at constant currency.

• Enterprise Services revenue is expected to grow in the low-to-mid single digits, while Server product revenue is projected to decline in the mid-single digits.

Additionally, the company’s continued investment in AI and data center expansion signals its long-term growth strategy.

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