Nvidia ETFs To Buy On Upbeat Q3 Earnings

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Nvidia (NVDA - Free Report) reported blockbuster third-quarter fiscal 2022 results after market close yesterday, wherein it outpaced the Zacks Consensus Estimate for both earnings and revenues. The company also offered an upbeat guidance for the ongoing quarter.

Following the robust results, shares of Nvidia climbed nearly 4% in after-hours trading on elevated volume. As such, ETFs having the largest allocation to NVIDIA could make compelling plays for investors. These include VanEck Vectors Semiconductor ETF (SMH - Free Report), VanEck Vectors Video Gaming and eSports ETF (ESPO - Free Report), Invesco PHLX Semiconductor ETF (SOXQ - Free Report), and iShares Semiconductor ETF (SOXX - Free Report).

Nvidia Earnings in Focus

Earnings per share came in at $1.17, beating the Zacks Consensus Estimate of $1.11 and improving 60% from the year-ago earnings. Revenues jumped 50% year over year to a record $7.10 billion and outpaced the consensus mark of $6.83 billion. The strong results were driven by record revenues in gaming, data center, and professional visualization market platforms.

Gaming revenues climbed 42% year over year to $3.22 billion while data center sales surged 55% to $2.94 billion. Surging demand for Nvidia AI is driven by hyperscale and cloud scale-out, and broader adoption by more than 25,000 companies.

Nvidia provided revenue guidance for the fiscal fourth quarter of $7.40 billion (+/-2%). This is well above the Zacks Consensus Estimate of $6.89 billion. The chipmaker is expected to see continued momentum in the gaming business for the rest for the year led by new gaming titles and holiday season.

ETFs in Focus

Let’s delve into each ETF below:

VanEck Vectors Semiconductor ETF

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 second position at 19%.  

VanEck Vectors Semiconductor ETF has managed assets worth $6.7 billion and charges 35 bps in annual fees and expenses. SMH is heavily traded with volume of 3.2 million shares per day and has a Zacks ETF Rank #1 with a High risk outlook.

VanEck Vectors Video Gaming and eSports ETF

VanEck Video Gaming and eSports ETF 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. ESPO holds 26 stocks, with NVIDIA taking the second spot with 9.3% share. VanEck Video Gaming and eSports ETF is tilted toward American firms, which account for 44.7% of the portfolio, while Japan and China round off the next two with double-digit allocations each.

VanEck Video Gaming and eSports ETF has gathered $671 million in its asset base while trading in an average daily volume of 80,000 shares. ESPO charges 55 bps in annual fees from investors.

Invesco PHLX Semiconductor ETF

Invesco PHLX Semiconductor ETF offers exposure to the 30 largest U.S.-listed securities of companies engaged in the semiconductor business. SOXQ tracks the PHLX Semiconductor Sector Index, with Nvidia occupying the top position with 9.5% share in the basket. Invesco PHLX Semiconductor ETF is dominated by American firms with 88.5% allocation.

Invesco PHLX Semiconductor ETF debuted in the space in June and has accumulated $70.8 million in its asset base. SOXQ came up with zero fees and trades in an average daily volume of 26,000 shares.

iShares Semiconductor ETF

iShares Semiconductor ETF has targeted access to domestic semiconductor stocks. SOXX offers exposure to companies that design, manufacture and distribute semiconductors. iShares Semiconductor ETF tracks the iShares Semiconductor ETF, holding 30 stocks in its basket. Of these, NVIDIA takes the top position with 9.7% share.

iShares Semiconductor ETF has amassed $8.7 billion in its asset base and charges a fee of 43 bps a year. SOXX trades in a solid volume of 869,000 shares and has a Zacks ETF Rank #1 with a High risk outlook.

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