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Nvidia Poised for Strong Q1 Earnings: ETFs to Soar
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Graphics chipmaker NVIDIA (NVDA - Free Report) is set to release first-quarter fiscal 2022 results on May 26, 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 rallying over the past three months, reaping gains of 13.8% and outperforming the industry average loss of 1.6%. This uptrend is likely to continue given the that the chipmaker has strong chances of beating estimates and saw positive earnings revisions, which are generally a precursor to an earnings beat, ahead of its Q1 report.
Earnings Whispers
NVIDIA currently has a Zacks Rank #2 (Buy) and has an Earnings ESP of +1.94%. 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.
This videogame-gear specialist saw positive earnings estimate revision of a couple of cents over the past 30 days for the first quarter of fiscal 2022. Analysts increasing estimates right before earnings — with the most up-to-date information possible — is a good indicator for the stock. The company’s earnings surprise history is solid. It delivered an earnings surprise of 10.71%, on average, in the last four quarters. Additionally, it is expected to post robust earnings and revenue growth of 82.2% and 74.8%, respectively, for the to-be-reported quarter (read: 5 Best-Performing ETFs at Half-Way Q2).
NVIDIA Corporation Price, Consensus and EPS Surprise
The Zacks Consensus Estimate for the average target price is $646.68 with nearly 85% of the analysts giving a Strong Buy or a Buy rating ahead of the company’s earnings.
What’s Hot?
Nvidia announced a 4 for 1 stock split in the form of a stock dividend. The split has been approved by the Board of Directors but is awaiting approval from shareholders at the company's annual meeting on Jun 3. If approved, each Nvidia shareholder of record at the close of business on Jun 21 will receive three additional shares of common stock for every share held. Nvidia stock will begin trading on the split-adjusted basis on Jul 20.
The move will make the stock more accessible to investors and employees, and attract individual investors, who make small trades.
What to Watch?
Many analysts expect a strong quarter for Nvidia, especially in gaming, and strength in data center.
In April, Nvidia had said that first-quarter fiscal 2022 revenues are on track to exceed the previously guided forecast of $5.30 billion (+/-2%) with “outperformance in each of its market platforms” including gaming, data center, professional visualization and automotive. In particular, the new cryptocurrency mining processor product used in cryptocurrency mining is expected to see better-than-expected sales from $50 million to $150 million (read: ETFs to Buy on Nvidia's Growth Story).
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 NVIDIA 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 32 stocks in its basket with NVIDIA occupying the top spot with 9.3% share. The ETF has AUM of $2.5 billion and an average daily volume of 669,000 shares. It charges 68 bps in annual fees.
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. It holds 25 stocks with NVIDIA taking the top spot with 9.1% 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 has gathered $798.4 million in its asset base while trading in an average daily volume of 104,000 shares. It charges 55 bps in annual fees from investors (read: Video Gaming ETFs to Gain on Surging Sales Amid Pandemic).
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 top position with 9% share. The fund has amassed $6.2 billion in its asset base and charges a fee of 46 bps a year. It trades in a solid volume of 1.6 million shares and has a Zacks ETF Rank #2 with a High risk outlook.
This ETF invests in the most inspiring, biblically aligned large companies in the United States. It follows the Inspire 100 Index and holds 101 stocks in its basket with NVIDIA taking the top position at 7.9% share. The fund has accumulated $232 million in its asset base and trades in an average daily volume of 26,000 shares. It charges 35 bps in annual fees.
This fund provides exposure to 25 securities by tracking the MVIS US Listed Semiconductor 25 Index. Nvidia occupies the second position with 8.2% of the assets. The product has managed assets worth $5.3 billion and charges 35 bps in annual fees and expenses. It is heavily traded with volume of 4.9 million shares per day and has a Zacks ETF Rank #3 with a High risk outlook.
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Nvidia Poised for Strong Q1 Earnings: ETFs to Soar
Graphics chipmaker NVIDIA (NVDA - Free Report) is set to release first-quarter fiscal 2022 results on May 26, 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 rallying over the past three months, reaping gains of 13.8% and outperforming the industry average loss of 1.6%. This uptrend is likely to continue given the that the chipmaker has strong chances of beating estimates and saw positive earnings revisions, which are generally a precursor to an earnings beat, ahead of its Q1 report.
Earnings Whispers
NVIDIA currently has a Zacks Rank #2 (Buy) and has an Earnings ESP of +1.94%. 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.
This videogame-gear specialist saw positive earnings estimate revision of a couple of cents over the past 30 days for the first quarter of fiscal 2022. Analysts increasing estimates right before earnings — with the most up-to-date information possible — is a good indicator for the stock. The company’s earnings surprise history is solid. It delivered an earnings surprise of 10.71%, on average, in the last four quarters. Additionally, it is expected to post robust earnings and revenue growth of 82.2% and 74.8%, respectively, for the to-be-reported quarter (read: 5 Best-Performing ETFs at Half-Way Q2).
NVIDIA Corporation Price, Consensus and EPS Surprise
NVIDIA Corporation price-consensus-eps-surprise-chart | NVIDIA Corporation Quote
The Zacks Consensus Estimate for the average target price is $646.68 with nearly 85% of the analysts giving a Strong Buy or a Buy rating ahead of the company’s earnings.
What’s Hot?
Nvidia announced a 4 for 1 stock split in the form of a stock dividend. The split has been approved by the Board of Directors but is awaiting approval from shareholders at the company's annual meeting on Jun 3. If approved, each Nvidia shareholder of record at the close of business on Jun 21 will receive three additional shares of common stock for every share held. Nvidia stock will begin trading on the split-adjusted basis on Jul 20.
The move will make the stock more accessible to investors and employees, and attract individual investors, who make small trades.
What to Watch?
Many analysts expect a strong quarter for Nvidia, especially in gaming, and strength in data center.
In April, Nvidia had said that first-quarter fiscal 2022 revenues are on track to exceed the previously guided forecast of $5.30 billion (+/-2%) with “outperformance in each of its market platforms” including gaming, data center, professional visualization and automotive. In particular, the new cryptocurrency mining processor product used in cryptocurrency mining is expected to see better-than-expected sales from $50 million to $150 million (read: ETFs to Buy on Nvidia's Growth Story).
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 NVIDIA 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 32 stocks in its basket with NVIDIA occupying the top spot with 9.3% share. The ETF has AUM of $2.5 billion and an average daily volume of 669,000 shares. It charges 68 bps in annual fees.
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. It holds 25 stocks with NVIDIA taking the top spot with 9.1% 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 has gathered $798.4 million in its asset base while trading in an average daily volume of 104,000 shares. It charges 55 bps in annual fees from investors (read: Video Gaming ETFs to Gain on Surging Sales Amid Pandemic).
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 top position with 9% share. The fund has amassed $6.2 billion in its asset base and charges a fee of 46 bps a year. It trades in a solid volume of 1.6 million shares and has a Zacks ETF Rank #2 with a High risk outlook.
Inspire 100 ETF (BIBL - Free Report)
This ETF invests in the most inspiring, biblically aligned large companies in the United States. It follows the Inspire 100 Index and holds 101 stocks in its basket with NVIDIA taking the top position at 7.9% share. The fund has accumulated $232 million in its asset base and trades in an average daily volume of 26,000 shares. It charges 35 bps in annual fees.
VanEck Vectors Semiconductor ETF (SMH - Free Report)
This fund provides exposure to 25 securities by tracking the MVIS US Listed Semiconductor 25 Index. Nvidia occupies the second position with 8.2% of the assets. The product has managed assets worth $5.3 billion and charges 35 bps in annual fees and expenses. It is heavily traded with volume of 4.9 million shares per day and has a Zacks ETF Rank #3 with a High risk outlook.
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Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week. Get it free >>