ETFs To Buy On Nvidia's Blowout Q1 Earnings

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Nvidia (NVDA - Free Report) cheered investors with its solid first-quarter fiscal 2024 results, wherein it topped both earnings and revenue estimates buoyed by the strength of its data center business. It also offered a bullish revenue outlook for the current quarter on booming artificial intelligence (AI) demand for its high-powered chips.

Nvidia shares zoomed as much as 29% to its highest level ever in after-market trading on elevated volume. This has raised the NVDA stock’s market value by about $200 billion to over $960 billion, extending the Silicon Valley company's lead as the world's most valuable chipmaker and Wall Street's fifth-most valuable company. In pre-market trade, the stock is up more than 25% at the time of writing.

Investors could tap the strength with the help of ETFs having the largest allocation to NVIDIA in focus. These include AXS Esoterica NextG Economy ETF (WUGI - Free Report), Pacer Data and Digital Revolution ETF (TRFK - Free Report), VanEck Vectors Semiconductor ETF (SMH - Free Report), The Spear Alpha ETF (SPRX - Free Report) and Global X Robotics & Artificial Intelligence ETF (BOTZ - Free Report).


Nvidia Earnings in Focus 

Earnings per share came in at $1.09, outpacing the Zacks Consensus Estimate of 92 cents and improving 24% from the year-ago earnings. Revenues dropped 13% year over year to $7.19 billion but edged past the consensus mark of $6.52 billion. Nvidia is at the center of the artificial intelligence explosion thanks to its high-powered graphics cards and server products.

Data center revenues rose 14% year over year to a record $4.28 billion, while gaming revenues were down 38% from a year ago.

For the second quarter of fiscal 2024, the graphics chipmaker expects revenues of around $11 billion, plus or minus 2% on increased demand for its data-center family of products, including H100, Grace CPU, Grace Hopper Superchip, NVLink, Quantum 400 InfiniBand and BlueField-3 DPU, sparked by the AI boom.

Nvidia CEO Jensen Huang said the company is seeing “surging demand” for these products and is “significantly increasing” supply. The company is boosting supply to meet surging demand for its artificial intelligence chips, which are used to power ChatGPT and many similar services.

Per the yahoo finance article, hedge funds have increased exposure to NVDA as the chipmaker continues to win large-volume orders for its AI chips and growing GPU order momentum in the gaming market.


ETFs in Focus 

Let’s delve into each ETF below:

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 29 stocks in the basket, with Nvidia occupying the top position at 14.4%. AXS Esoterica NextG Economy ETF has key holdings in electronic compo-semiconductor, computer software, and applications software.

AXS Esoterica NextG Economy ETF has accumulated $18.7 million in its asset base and charges 75 bps in fees per year. It trades in an average daily volume of 2,000 shares.

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 10.3% share. Semiconductors takes the largest share at 33.7%, while communication equipment and system software round off the next two spots.

Pacer Data and Digital Revolution ETF debuted in June last year and has accumulated $1.1 million in its asset base. It has an expense ratio of 0.60%. TRFK trades in a meager volume of nearly 1,000 shares per day on average and has a Zacks ETF Rank #3 (Hold).

VanEck Vectors Semiconductor ETF (SMH)

VanEck Vectors Semiconductor ETF offers exposure to the 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 25 stocks in its basket, with Nvidia occupying the top position at 14.5%.  

VanEck Vectors Semiconductor ETF has managed assets worth $8.5 billion and charges 35 bps in annual fees and expenses. SMH is heavily traded with a volume of 7 million shares per day and has a Zacks ETF Rank #2 (Buy) with a High risk outlook.

The Spear Alpha ETF (SPRX)

The Spear Alpha ETF is an actively managed fund that invests in companies poised to benefit from breakthrough trends in industrial technology. The ETF’s objective is to find underappreciated opportunities across different industrial supply chains that are beneficiaries of secular themes such as enterprise digitalization, automation & robotics, artificial intelligence, environmental focus and decarbonization, photonics and additive manufacturing, and space exploration. The Spear Alpha ETF holds 23 stocks in its basket, with Nvidia taking the top spot at a 9.6% share.

The Spear Alpha ETF has accumulated $4.1 million in its asset base and charges 75 bps in annual fees. It trades in an average daily volume of 4,000 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 second spot with a 9.6% share. The ETF has AUM of $2 billion and an average daily volume of 747,000 shares. It charges 69 bps in annual fees.


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