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Investors’ favorite Nvidia (NVDA - Free Report) is set to release its third-quarter fiscal 2024 results on Nov 21, after market close. This graphics chipmaker, currently the world’s most valuable semiconductor company, has been on the hottest winning streak, gaining more than 20% this week and adding an astounding $28 billion in market value. Nvidia, having risen more than 230% so far this year, is on track for the best year since 2001, as tracked by Dow Jones Market Data Group.

The outperformance is expected to continue, given reasonable chances of an earnings beat and positive earnings revisions. Given this, ETFs having the largest allocation to Nvidia could make compelling plays ahead of its earnings report. These include GraniteShares 1.5x Long NVDA Daily ETF (NVDL - Free Report), VanEck Vectors Semiconductor ETF (SMH - Free Report), AXS Esoterica NextG Economy ETF (WUGI - Free Report), Global X Robotics & Artificial Intelligence ETF (BOTZ - Free Report) and Pacer Data and Digital Revolution ETF (TRFK - Free Report).

Earnings Whispers

Nvidia currently has a Zacks Rank #1 (Strong Buy) and an Earnings ESP of +1.84%. According to our methodology, the combination of a positive Earnings ESP and a Zacks Rank #1, 2 (Buy) 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 Filter.

This videogame-gear specialist saw a positive earnings estimate revision of a couple of cents over the past seven days for the third quarter of fiscal 2024. Analysts increasing estimates right before earnings — with the most up-to-date information possible — is a good indicator for the stock. Nvidia’s earnings surprise history is good, as it delivered an earnings surprise of 9.79%, on average, in the last four quarters. Nvidia is expected to post earnings and revenue growth of 479.31% and 171.8%, respectively, for the to-be-reported quarter.

Nvidia currently has an average brokerage recommendation (ABR) of 1.13 on a scale of 1 to 5 (Strong Buy to Strong Sell), calculated based on the actual recommendations (Buy, Hold, Sell etc.) made by 36 brokerage firms. The current ABR compares to an ABR of 1.13 a month ago based on 36 recommendations.

Of the 36 recommendations deriving the current ABR, 32 are Strong Buy and three are Buy. Strong Buy and Buy, respectively, account for 88.89% and 8.33% of all recommendations. A month ago, Strong Buy made up 88.89%, while Buy represented 8.33%.

Based on short-term price targets offered by 34 analysts, the average price target for Nvidia comes to $631.41. The forecasts range from a low of $460.00 to a high of $1,100.00.

What’s Hot?

The AI-driven frenzy, coupled with the rebound in technology stocks amid hopes that Fed interest rates have peaked, has driven the stock higher lately.

A key factor driving the surge is Nvidia's dominant position in the AI sector. The world’s largest chipmaker continues to benefit from the explosive demand for its cutting-edge chips used in AI applications, which are used to power ChatGPT and many similar services. It is boosting supply to meet surging demand. Nvidia's chips are used in applications ranging from robotics and the metaverse to medical imaging and video analytics.

In fact, the launch of its latest AI processor, the H200 chip, has played a crucial role in the company's record-breaking rally, highlighting Nvidia's innovative strength in the AI sector. Nvidia said that H200 will get the ability to use high-bandwidth memory, or HBM3e, allowing it to better cope with the large data sets needed for developing and implementing AI.

For the third quarter of fiscal 2024, the graphics chipmaker expects revenues of around $16 billion, plus or minus 2%. On its last earnings call, Nvidia CEO Jensen Huang said, "A new computing era has begun." "Companies worldwide are transitioning from general-purpose to accelerated computing and generative AI".

ETFs to Tap

Let’s delve into each ETF below:

GraniteShares 1.5x Long NVDA Daily ETF (NVDL)

GraniteShares 1.5x Long NVDA Daily ETF magnifies exposure to a single trade, seeking 1.5 times (150%) the daily percentage change of the common stock of NVIDIA. It has an expense ratio of 1.15% and trades in a volume of 603,000 shares a day on average. GraniteShares 1.5x Long NVDA Daily ETF has amassed $248.1 million in its asset base.

VanEck Vectors Semiconductor ETF (SMH)

VanEck Vectors Semiconductor ETF offers exposure to companies involved in semiconductor production and equipment. SMH 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 20.1%.  

VanEck Vectors Semiconductor ETF has managed assets worth $11 billion and charges 35 bps in annual fees and expenses. SMH is heavily traded with a volume of 9 million shares per day and has a Zacks ETF Rank #1 with a High risk outlook.

AXS Esoterica NextG Economy ETF (WUGI)

AXS Esoterica NextG Economy ETF is an actively managed ETF that invests in stocks of companies that benefit from the ever-evolving digital economy. It holds 33 stocks in the basket, with Nvidia occupying the top position at 20%.

AXS Esoterica NextG Economy ETF has accumulated $22.9 million in its asset base and charges 75 bps in fees per year. It trades in an average daily volume of 2,000 shares.

Global X Robotics & Artificial Intelligence ETF (BOTZ)

Global X Robotics & Artificial Intelligence ETF follows the Indxx Global Robotics & Artificial Intelligence Thematic Index, which seeks investment in companies that stand to benefit from the increased adoption and utilization of robotics and AI, including those involved with industrial robotics and automation, non-industrial robots and autonomous vehicles.

Global X Robotics & Artificial Intelligence ETF has 44 stocks in its basket, with NVIDIA occupying the top spot with 15.6% share. The ETF has AUM of $2 billion and an average daily volume of 848,000 shares. It charges 69 bps in annual fees.

Pacer Data and Digital Revolution ETF (TRFK)

Pacer Data and Digital Revolution ETF aims to offer investors exposure to the globally listed stocks and depositary receipts of data and digital revolution companies. It follows the Pacer Data Transmission and Communication Revolution Index, holding 80 stocks in its basket. Out of these, Nvidia is the top firm, accounting for a 10% share.

Pacer Data and Digital Revolution ETF has accumulated $5.3 million in its asset base. It has an expense ratio of 0.60%. TRFK trades in a meager volume of about 1,000 shares per day on average.

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