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3 days ago
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ETFs to Buy After NVIDIA's Q1 Earnings Miss, Record Revenues
NVIDIA NVDA reported mixed first-quarter fiscal 2026 results. Though the AI darling lagged earnings estimates, it reported record-breaking revenues, which topped estimates. NVIDIA shares jumped as much as 6% in after-hours trading. Investors seeking to tap the company's growth could invest in ETFs having the largest allocation to the AI chipmaker. Strive U.S. Semiconductor ETF SHOC, VanEck Vectors Semiconductor ETF SMH, VanEck Fabless Semiconductor ETF SMHX, YieldMax Target 12 Semiconductor Option Income ETF SOXY and Columbia Select Technology ETF SEMI could be compelling options. The company's earnings per share were 81 cents for the first quarter, missing the Zacks Consensus Estimate by 4 cents and up from 61 cents reported in the year-ago quarter. This marked an end to nine straight quarters of earnings beats. Revenues surged 69% year over year to a record $44.1 billion and beat the consensus mark of $42.70 billion. The impressive performance was largely driven by a booming data center business. The blockbuster results were driven by incredible demand for NVIDIA's latest AI chips. Data Center revenues, which account for much of NVIDIA's revenues, jumped 73% year over year to $39.1 billion (read:NVIDIA Reclaims $3 Trillion: ETFs to Bet On).The gaming division also performed strongly, with revenues climbing 42% year over year to $3.8 billion. This growth was bolstered by the launch of the Nintendo Switch 2, which features NVIDIA's chips and AI-powered DLSS technology supporting up to 4K gaming. NVIDIA's graphics processing capabilities, historically focused on gaming, are now increasingly used in AI applications, highlighting the broadening utility of its automotive and robotics segment saw a 72% revenue increase, reaching $567 million. Growth in this area was driven by rising demand for self-driving car chips and robotics software, including a significant advance in humanoid robotics. The company introduced Isaac GR00T N1 — the world's first open humanoid robot foundation model — and outlined plans to deepen its involvement in robotics demand for NVIDIA's artificial intelligence (AI) chips, especially for large cloud providers and AI supercomputing, continues to surge. NVIDIA is building factories in the United States and working with its partners to produce AI supercomputers. NVIDIA CEO Jensen Huang said, "Countries around the world are recognizing AI as essential infrastructure – just like electricity and the internet – and NVIDIA stands at the center of this profound transformation." Its chief financial officer, Colette Kress, said that Microsoft has 'deployed tens of thousands of Blackwell GPUs and is expected to ramp to hundreds of thousands' of the company's GB200 product, due largely to its partnership with is also accelerating its global expansion. It recently announced plans to build AI factories in the United States and Saudi Arabia and launched the Stargate UAE AI infrastructure cluster in Abu Dhabi. Furthermore, NVIDIA has expanded collaborations with major cloud providers, including Oracle, Google, and Microsoft. Its Blackwell-based cloud instances are now available on AWS, Google Cloud, Microsoft Azure and Oracle Cloud Infrastructure (read: Stocks & ETFs to Benefit From Trump's Stargate Project).Looking ahead to the second quarter of fiscal 2026, the graphics chipmaker expects revenues of $45 billion, plus or minus 2%. The Zacks Consensus Estimate is pegged at $45.1 billion. This guidance includes an estimated $8 billion hit from H20 export restrictions, largely impacting sales to China. The AI darling has lost billions in revenues from Trump's ban on its chip exports to China. Despite this, NVIDIA remains confident in the ongoing global demand for its AI infrastructure. Strive U.S. Semiconductor ETF (SHOC)Strive U.S. Semiconductor ETF seeks broad market exposure to the U.S. semiconductor sector. It follows the Bloomberg US Listed Semiconductors Select Total Return Index and holds 32 stocks in its basket, with NVIDIA accounting for the top firm at 22.9%. Strive U.S. Semiconductor ETF has an AUM of $81.8 million and charges 40 bps in annual fees. It trades in a volume of 10,000 shares per day on average and sports a Zacks ETF Rank #1 (Strong Buy).VanEck Vectors Semiconductor ETF (SMH)VanEck Vectors Semiconductor ETF offers exposure to companies involved in semiconductor production and equipment. It follows the MVIS US Listed Semiconductor 25 Index, which tracks the most liquid companies in the industry based on market capitalization and trading volume. VanEck Vectors Semiconductor ETF holds 26 stocks in its basket, with NVIDIA occupying the top position at 21.1%. It has managed assets worth $22 billion and charges 35 bps in annual fees and expenses. VanEck Vectors Semiconductor ETF trades in an average daily volume of 6 million shares and flaunts a Zacks ETF Rank # Fabless Semiconductor ETF (SMHX)VanEck Fabless Semiconductor ETF offers exposure to companies involved in semiconductor production and is classified as a fabless. It follows the MarketVector US Listed Fabless Semiconductor Index and holds 23 stocks in its basket. NVIDIA takes the top spot at 20.6% share. SMHX, which debuted in the space in late August, has accumulated $47.8 million in its asset base. VanEck Fabless Semiconductor ETF charges 35 bps in annual fees and trades in a volume of 40,000 shares. It flaunts a Zacks ETF Rank # Target 12 Semiconductor Option Income ETF (SOXY) YieldMax Target 12 Semiconductor Option Income ETF is an actively managed ETF that seeks a target annual income level of 12% and capital appreciation via direct investments in a select portfolio of semiconductor companies. NVIDIA occupies the top position in the portfolio with a 19.5% share. YieldMax Target 12 Semiconductor Option Income ETF debuted in December and has gathered $6 million in its asset base. It charges 99 bps in annual fees and trades in an average daily volume of 3,000 Select Technology ETF (SEMI) Columbia Select Technology ETF is an actively managed ETF that focuses on semiconductor and semiconductor-related businesses that may be poised to benefit from technology innovation and disruption. It follows the S&P Global 1200 Information Technology Index and holds 35 stocks in its basket, with NVIDIA occupying the second position at 17.2%. Columbia Select Technology ETF has amassed $37.3 million in its asset base and trades in an average daily volume of 4,000 shares. It charges 75 bps in fees per year. 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 NVIDIA Corporation (NVDA) : Free Stock Analysis Report VanEck Semiconductor ETF (SMH): ETF Research Reports Columbia Select Technology ETF (SEMI): ETF Research Reports Strive U.S. Semiconductor ETF (SHOC): ETF Research Reports VanEck Fabless Semiconductor ETF (SMHX): ETF Research Reports This article originally published on Zacks Investment Research ( Zacks Investment Research
Yahoo
25-02-2025
- Business
- Yahoo
What's in Store for NVIDIA ETFs in Q4 Earnings?
AI leader NVIDIA NVDA is in the spotlight as it is set to release its fiscal fourth-quarter 2025 results after market close on Feb. 26. The chipmaker, which powered the bull market, has faltered in recent weeks ahead of its earnings chipmaker has lost 4.3% over the past three months against the industry's growth of 4.1%. Shares of NVIDIA hit a new all-time high in early January but lost momentum on DeepSeek challenge to the domestic AI stocks. The chipmaker could regain its lost strength if it comes up with an earnings beat (read: AI Winners Following the DeepSeek Disruption). ETFs having the largest allocation to NVIDIA will be in focus ahead of its earnings report. These include Strive U.S. Semiconductor ETF SHOC, VanEck Vectors Semiconductor ETF SMH, VanEck Fabless Semiconductor ETF SMHX, YieldMax Target 12 Semiconductor Option Income ETF SOXY and Columbia Semiconductor and Technology ETF SEMI. NVIDIA currently has an Earnings ESP of 0.00% and a Zacks Rank #2 (Buy). According to our methodology, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 or 3 (Hold) increases the chances of an earnings beat. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP AI leader saw no earnings estimate revisions for the fourth quarter of fiscal 2025 over the past 30 days. The Zacks Consensus Estimate calls for 70.7% revenue growth and 61.5% earnings growth for the fiscal fourth quarter. NVIDIA's earnings surprise history is also good, as it delivered an earnings surprise of 9.79%, on average, in the last four quarters. NVIDIA Corporation price-consensus-eps-surprise-chart | NVIDIA Corporation Quote NVIDIA has a Growth Score of B and belongs to a top-ranked Zacks industry (in the top 23%), suggesting that it is primed for Street analysts maintained their bullish view on the stock, with a recommendation of 1.23 on a scale of 1 to 5 (Strong Buy to Strong Sell), made by 44 brokerage firms. Of these, 38 are Strong Buy and two are Buy. Strong Buy and Buy, respectively, account for 86.36% and 4.55% of all on short-term price targets offered by 42 analysts, the average price target for NVIDIA comes to $177.43. The forecasts range from a low of $135.00 to a high of $220.00. NVIDIA plummeted nearly 17%, wiping about $600 billion in market value — the largest single-day loss in U.S. stock market history after DeepSeek, a China-based artificial intelligence (AI) startup, threatened to disrupt American dominance. Since then, shares have mostly bounced back, with analysts seeing even more room to run (read: DeepSeek Shakes US Tech Dominance: Impact on Stocks & ETFs). In fact, booming demand for DeepSeek's low-cost AI models is providing a boost to NVIDIA as Chinese companies are ramping up orders for NVIDIA's H20 artificial intelligence chip. The surge in orders could help alleviate concerns that DeepSeek might cause a slide in AI chip demand. NVIDIA is a global leader in the AI chip market, controlling between 80% and 95% of the market, according to Reuters. Its success is largely attributed to its leadership in developing advanced graphics processing units (GPUs), which are unmatched in producing processors that power artificial intelligence systems, including generative AI, the technology backing OpenAI's ChatGPT that can create text, images and other media. Most analysts believe NVIDIA will become far more valuable in the future due to its dominance in the billion-dollar AI chip the last conference call, CEO Jensen Huang said 'The age of AI is in full steam, driving a global transition to NVIDIA computing.' As such, NVIDIA launched a raft of new chips, software and services in January, aiming to stay at the forefront of artificial intelligence computing. It debuted the latest generation of graphics processors for desktop and laptop gaming systems, dubbed the GeForce RTX 50 Series. The series includes RTX 5090, RTX 5080, RTX 5070 Ti and RTX 5070 (read: NVIDIA Regains Momentum on AI Growth: ETFs to Tap). The AI chip leader also debuted NVIDIA Cosmos, a computing platform for accelerating physical AI development. Further, the company announced a high-end personal computer called Project Digits, powered by NVIDIA GB10 Grace Blackwell Superchip and running the Linux-based NVIDIA DGX operating company's chief financial officer, Colette Kress, revealed that Blackwell production will begin in the fourth quarter of fiscal 2025 and ramp up in fiscal 2026. 'Demand for Blackwell is expected to exceed supply for several quarters,' Kress said. Management expects NVIDIA's gross profit margin to rebound as its Blackwell chip family ramps into bigger the fourth quarter of fiscal 2025, the graphics chipmaker expects revenues of $37.5 billion, plus or minus 2%. NVIDIA is currently trading at a P/E ratio of 31.95, slightly lower than the Semiconductor - General industry average of 32.26. Further, the stock is currently trading at a PEG ratio of 1.60, much lower than the industry average of 2.24. The lower the PEG ratio, the better the value, as investors would pay less for each unit of earnings. Strive U.S. Semiconductor ETF (SHOC) – NVIDIA exposure: 19.5%VanEck Vectors Semiconductor ETF (SMH) – NVIDIA exposure: 19%VanEck Fabless Semiconductor ETF (SMHX) – NVIDIA exposure: 19.7%YieldMax Target 12 Semiconductor Option Income ETF (SOXY) – NVIDIA exposure: 18.1%Columbia Semiconductor and Technology ETF (SEMI) – NVIDIA exposure: 17.7% Investors seeking to take on more risk could bet on single-stock ETFs with 200% exposure to NVIDIA. These include the T-REX 2X Long NVIDIA Daily Target ETF NVDX and the GraniteShares 2x Long NVDA Daily ETF NVDA WeeklyPay ETF NVW seeks to provide weekly distributions and calendar week returns, equal to 1.2 times (120%) the calendar week total return of NVIDIA shares. 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 NVIDIA Corporation (NVDA) : Free Stock Analysis Report VanEck Semiconductor ETF (SMH): ETF Research Reports Columbia Semiconductor and Technology ETF (SEMI): ETF Research Reports Strive U.S. Semiconductor ETF (SHOC): ETF Research Reports VanEck Fabless Semiconductor ETF (SMHX): ETF Research Reports This article originally published on Zacks Investment Research ( Zacks Investment Research Sign in to access your portfolio
