NVIDIA ETFs To Buy Ahead Of Q1 Earnings

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Investors’ favorite NVIDIA (NVDA - Free Report) is set to release its first-quarter fiscal 2025 results on May 22, after market close. The world’s most valuable semiconductor company continued its hot streak of 2023, gaining more than $1.1 trillion in market cap so far this year, powered by the accelerating demand for artificial intelligence (AI).

The chipmaker has risen 37.1% over the past three months, outperforming the industry’s growth of 21.5%. The strong trend is expected to reverse, given that NVIDIA has a higher chance to beat earnings estimates and saw positive earnings estimate revision activity, which is generally a precursor to an earnings beat.

ETFs having the largest allocation to NVIDIA could make compelling plays ahead of its earnings report. These include Strive U.S. Semiconductor ETF (SHOC - Free Report), VanEck Vectors Semiconductor ETF (SMH - Free Report), Grizzle Growth ETF (DARP - Free Report), TrueShares Technology, AI and Deep Learning ETF (LRNZ - Free Report) and Invesco PHLX Semiconductor ETF (SOXQ - Free Report).

Earnings Whispers

NVIDIA currently has an Earnings ESP of +3.62% 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 Filter.

The world’s largest chipmaker saw a positive earnings estimate revision of 3 cents over the past seven days for the first quarter of fiscal 2025. Analysts increasing estimates right before earnings — with the most up-to-date information possible — is a good indicator for the stock. NVIDIA is expected to post massive earnings and revenue growth of 402.7% and 237.5%, respectively, for the to-be-reported quarter. NVIDIA’s earnings surprise history is good, as it delivered an earnings surprise of 20.18%, on average, in the last four quarters.

NVIDIA currently has an average brokerage recommendation (ABR) of 1.20 on a scale of 1 to 5 (Strong Buy to Strong Sell), calculated based on the actual recommendations (Buy, Hold, Sell, etc.) made by 41 brokerage firms. The current ABR compares to an ABR of 1.20 a month ago based on 41 recommendations.

Of the 41 recommendations deriving the current ABR, 36 are Strong Buy, and two are Buy. Strong Buy and Buy, respectively, account for 87.8% and 4.88% of all recommendations. A month ago, Strong Buy made up 87.8%, while Buy represented 4.88%.

Based on short-term price targets offered by 40 analysts, the average price target for NVIDIA comes to $990.51. The forecasts range from a low of $608.40 to a high of $1,350.00.

What’s Hot?

Investors will be closely watching the updates for the company’s new chip, Blackwell, which will be the world’s most powerful chip and the highest-performance AI chip on the market ahead of its current H200 series and AMD’s (AMD) MI300 series. Blackwell-based products will be available later this year. Most analysts expect a slowdown during the transition to these next-generation models from NVIDIA’s older H100 chips.

NVIDIA remained an undisputed leader in the AI space even following the recent launch of GPT-4o from ChatGPT maker OpenAI. It continues to benefit from the explosive demand for its cutting-edge chips used in AI applications and rapidly growing data centers. NVIDIA's chips are used in applications ranging from robotics and the metaverse to medical imaging and video analytics.

For the first quarter of fiscal 2025, the graphics chipmaker expects revenues of around $24 billion, indicating growth of 234% year over year.

ETFs to Tap

Let’s delve into each ETF below:

Strive U.S. Semiconductor ETF

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 26.9%.

Strive U.S. Semiconductor ETF has AUM of $64.8 million and charges 40 bps in annual fees. It trades in a volume of 13,000 shares per day on average and has a Zacks ETF Rank #2.

VanEck Vectors Semiconductor ETF

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 20.8%.  

VanEck Vectors Semiconductor ETF has managed assets worth $19.6 billion and charges 35 bps in annual fees and expenses. SMH has a Zacks ETF Rank #1 with a High-risk outlook.

Grizzle Growth ETF

Grizzle Growth ETF is an actively managed ETF that seeks long-term capital appreciation through companies focused on growth, innovation, and disruption. It seeks to identify future leaders in key growth themes, including Digitization and Cloud Computing, Future Media and Entertainment, Health and Wellness, and Sustainability and Energy Transition. Grizzle Growth ETF holds 41 stocks in its basket, with NVIDIA occupying the top position at 19.4% of assets.

Grizzle Growth ETF has accumulated $13.6 million in its asset base and charges 75 bps in annual fees.  

TrueShares Technology, AI and Deep Learning ETF

TrueShares Technology, AI, and Deep Learning ETF is an actively managed fund targeting companies that are significantly involved in the application of high levels of artificial intelligence. It holds 24 stocks in its basket, with NVIDIA taking the top spot at 13.4% share.

LRNZ has amassed $41.3 million in its asset base and trades in an average daily volume of 9,000 shares. It charges 69 bps in fees per year.

Invesco PHLX Semiconductor ETF

Invesco PHLX Semiconductor ETF offers exposure to the largest U.S.-listed securities of companies engaged in the semiconductor business. It tracks the PHLX Semiconductor Sector Index, holding 30 stocks in its basket. NVIDIA occupies the top position with a 13.3% share in the basket.

Invesco PHLX Semiconductor ETF has accumulated $398.2 million in its asset base. It charges 19 bps in annual fees and trades in an average daily volume of 205,000 shares. Invesco PHLX Semiconductor ETF has a Zacks ETF Rank #1.

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