Nvidia Earnings Report Puts These ETFs In Focus

NVIDIA (NVDA - Free Report) reported third-quarter fiscal 2020 results after the market close yesterday, wherein both its earnings and revenues surpassed the Zacks Consensus Estimate. However, the company issued soft revenue guidance for the ongoing quarter. Shares of NVIDIA initially gained 2% in after-hours trading but soon declined and eventually ended in the red territory thanks to soft guidance.

Earnings per share came in at $1.78, beating the Zacks Consensus Estimate significantly by 21 cents but declining from the year-ago quarter of $1.84. Moreover, revenues dropped 5% year over year to $3 billion but outpaced the consensus mark of $2.90 billion. Better-than-expected results came on the back of strong demand in gaming business and solid growth in its fast-growing data center business.

NVIDIA expects revenues of approximately $2.95 billion (+/-2%) for the fourth quarter of fiscal 2020 compared with $2.21 billion in the year-ago quarter. This suggests a return to revenue growth after four quarters of declines.

The stock currently has a Zacks Rank #3 (Hold) and an unattractive VGM Score of D. It falls within an unfavorable Zacks industry (placed at the bottom 35% of 250+ industries).

ETFs to Watch

This has put ETFs with higher allocation to this graphics chipmaker under the spotlight. Below we have highlighted some of the funds:

VanEck Vectors Video Gaming and eSports ETF (ESPO - Free Report)

This fund offers exposure to global companies, involved in video game development, e-sports and related hardware and software by tracking the MVIS Global Video Gaming and eSports Index. Holding 25 stocks in its basket, NVIDIA takes the top spot with 8.7% share. American firms account for one-third of the portfolio, while Japan and China round off the next two with a double-digit allocation. The fund has gathered $42 million in its asset base while trading in average daily volume of 12,000 shares. It charges 55 bps in annual fees from investors.

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