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Graphics chipmaker NVIDIA (NVDA - Free Report) is set to release third-quarter fiscal 2021 results on Nov 18, after market close. As it has been one of the hottest stocks in the semiconductor space, let’s take a look at its fundamentals ahead of the earnings release.
NVIDIA has been on a strong ride over the past three months, reaping gains of 10.3%, which outperformed the industry average of 8% by a wide margin. This trend is likely to continue given the optimism of the Wall Street analysts though an earnings surprise is difficult to predict this time.
Earnings Whispers
According to our methodology, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. Nvidia currently has a Zacks Rank #2 and an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
The videogame-gear specialist saw no earnings estimate revision over the past 30 days for the third quarter of fiscal 2021. The company’s earnings surprise history is solid. It delivered an earnings surprise of 11.53%, on average, in the last four quarters. Additionally, it is expected to post substantial earnings and revenue growth of 44.4% and 46.6%, respectively, for the to-be-reported quarter.
The Zacks Consensus Estimate for the average target price is $556.54 with nearly 88% of the analysts giving a Strong Buy or a Buy rating ahead of the company’s earnings.
What’s Hot?
A few analysts like Deutsche Bank, Susquehanna raised the price target on Nvidia on its continued strength in the gaming and data center markets. Nvidia’s revenues are expected to get a boost from graphics card sales, demand of which is on the rise, driven by the stay-at-home trends amid the coronavirus pandemic (read: Q3 Solid Earnings Push Semiconductor ETFs to New Highs).
ETFs in Focus
Ahead of the results, investors could focus on ETFs having the largest allocation to Nvidia. Below are five ETFs with the highest allocation to NVDA that could make compelling plays ahead of its earnings report:
Global X Robotics & Artificial Intelligence ETF (BOTZ - Free Report)
This fund 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. It has 31 stocks in its basket with Nvidia occupying the top spot with 8.7% share. The ETF has AUM of $2 billion and average daily volume of 1.1 million shares. It charges 68 bps in annual fees.
This fund aims to invest in the U.S.-listed companies products or services of which help protect against, endure or recover from biological threats to human health. It tracks the LifeSci BioThreat Strategy Index, holding 46 stocks in its basket. Nvidia occupies the top position with 8.4% of assets. The ETF accumulated $5.6 million in its asset base and charges 70 bps in annual fees. It trades in a paltry average daily volume of 2,000 shares.
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. The ETF holds 25 stocks and Nvidia takes the second spot with 7.8% share. American firms account for one-third of the portfolio while Japan and China round off the next two with double-digit allocations each. The fund gathered $580.4 million in its asset base while trading in average daily volume of 161,000 shares. It charges 55 bps in annual fees from investors (read: Sports Betting ETFs, Stocks to Surge on More Legalization).
This fund offers exposure to the most-liquid U.S. semiconductor securities based on volatility, value and growth by tracking the Nasdaq US Smart Semiconductor Index. Holding 30 stocks in its basket, Nvidia takes the fourth spot accounting for 8.3% of assets. FTXL accumulated $56 million in AUM. The average trading volume is light at around 9,000 shares and the expense ratio is 0.60%. FTXL has a Zacks ETF Rank #1 (Strong Buy).
This ETF offers exposure to 30 U.S. companies that design, manufacture and distribute semiconductors by tracking the PHLX SOX Semiconductor Sector Index. Of these, Nvidia takes the fourth position with 7.1% share. The fund amassed $4.1 billion in its asset base and charges a fee of 46 bps a year. It trades in a solid volume of 502,000 shares and has a Zacks ETF Rank of 1 with a High risk outlook.
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ETFs to Watch Ahead of Nvidia's Q3 Earnings
Graphics chipmaker NVIDIA (NVDA - Free Report) is set to release third-quarter fiscal 2021 results on Nov 18, after market close. As it has been one of the hottest stocks in the semiconductor space, let’s take a look at its fundamentals ahead of the earnings release.
NVIDIA has been on a strong ride over the past three months, reaping gains of 10.3%, which outperformed the industry average of 8% by a wide margin. This trend is likely to continue given the optimism of the Wall Street analysts though an earnings surprise is difficult to predict this time.
Earnings Whispers
According to our methodology, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. Nvidia currently has a Zacks Rank #2 and an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
The videogame-gear specialist saw no earnings estimate revision over the past 30 days for the third quarter of fiscal 2021. The company’s earnings surprise history is solid. It delivered an earnings surprise of 11.53%, on average, in the last four quarters. Additionally, it is expected to post substantial earnings and revenue growth of 44.4% and 46.6%, respectively, for the to-be-reported quarter.
The stock belongs to a bottom-ranked Zacks industry (placed at the bottom 17% of 250+ industries) (see: all the Technology ETFs here).
The Zacks Consensus Estimate for the average target price is $556.54 with nearly 88% of the analysts giving a Strong Buy or a Buy rating ahead of the company’s earnings.
What’s Hot?
A few analysts like Deutsche Bank, Susquehanna raised the price target on Nvidia on its continued strength in the gaming and data center markets. Nvidia’s revenues are expected to get a boost from graphics card sales, demand of which is on the rise, driven by the stay-at-home trends amid the coronavirus pandemic (read: Q3 Solid Earnings Push Semiconductor ETFs to New Highs).
ETFs in Focus
Ahead of the results, investors could focus on ETFs having the largest allocation to Nvidia. Below are five ETFs with the highest allocation to NVDA that could make compelling plays ahead of its earnings report:
Global X Robotics & Artificial Intelligence ETF (BOTZ - Free Report)
This fund 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. It has 31 stocks in its basket with Nvidia occupying the top spot with 8.7% share. The ETF has AUM of $2 billion and average daily volume of 1.1 million shares. It charges 68 bps in annual fees.
Pacer BioThreat Strategy ETF (VIRS - Free Report)
This fund aims to invest in the U.S.-listed companies products or services of which help protect against, endure or recover from biological threats to human health. It tracks the LifeSci BioThreat Strategy Index, holding 46 stocks in its basket. Nvidia occupies the top position with 8.4% of assets. The ETF accumulated $5.6 million in its asset base and charges 70 bps in annual fees. It trades in a paltry average daily volume of 2,000 shares.
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. The ETF holds 25 stocks and Nvidia takes the second spot with 7.8% share. American firms account for one-third of the portfolio while Japan and China round off the next two with double-digit allocations each. The fund gathered $580.4 million in its asset base while trading in average daily volume of 161,000 shares. It charges 55 bps in annual fees from investors (read: Sports Betting ETFs, Stocks to Surge on More Legalization).
First Trust Nasdaq Semiconductor ETF (FTXL - Free Report)
This fund offers exposure to the most-liquid U.S. semiconductor securities based on volatility, value and growth by tracking the Nasdaq US Smart Semiconductor Index. Holding 30 stocks in its basket, Nvidia takes the fourth spot accounting for 8.3% of assets. FTXL accumulated $56 million in AUM. The average trading volume is light at around 9,000 shares and the expense ratio is 0.60%. FTXL has a Zacks ETF Rank #1 (Strong Buy).
iShares PHLX Semiconductor ETF (SOXX - Free Report)
This ETF offers exposure to 30 U.S. companies that design, manufacture and distribute semiconductors by tracking the PHLX SOX Semiconductor Sector Index. Of these, Nvidia takes the fourth position with 7.1% share. The fund amassed $4.1 billion in its asset base and charges a fee of 46 bps a year. It trades in a solid volume of 502,000 shares and has a Zacks ETF Rank of 1 with a High risk outlook.
Want key ETF info delivered straight to your inbox?
Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week. Get it free >>