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What's in Store for Nvidia ETFs in Q1 Earnings

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Graphics chipmaker Nvidia (NVDA - Free Report) is set to release first-quarter fiscal 2023 results on May 25, after market close. Caught in the tech sector selling spree — triggered by rate hike concerns and the latest batch of dismal earnings reports from tech players — Nvidia has plunged 33.8% over the past three months.

The stock is underperforming the industry’s average loss of 15.1%. This trend might reverse if the chipmaker comes up with an earnings beat in its Q1 report (read: 5 Beaten-Down ETFs to Buy at Attractive Prices).

Given this, ETFs having the largest allocation to Nvidia could make compelling plays ahead of its earnings report. These include MicroSectors FANG+ ETN (FNGS - Free Report) , Global X Robotics & Artificial Intelligence ETF (BOTZ - Free Report) , VanEck Vectors Semiconductor ETF (SMH - Free Report) , TrueShares Technology, AI and Deep Learning ETF (LRNZ - Free Report) and Roundhill Ball Metaverse ETF (METV - Free Report) .

Earnings Whispers

Nvidia currently has a Zacks Rank #3 (Hold) and an Earnings ESP of +2.57%. According to our methodology, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 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 penny over the past 30 days for the first quarter of fiscal 2023. Analysts raising estimates right before earnings — with the most up-to-date information possible — is a good indicator for the stock. Nvidia’s earnings surprise history is solid. It delivered an earnings surprise of 1.34%, on average, in the last four quarters. Additionally, NVDA is expected to post robust earnings and revenue growth of 41.3% and 43.4%, respectively, for the to-be-reported quarter.

The Zacks Consensus Estimate for the average target price is $292.88, with nearly 75% of the analysts giving a Strong Buy or a Buy rating ahead of NVDA earnings.

What to Watch?

Nvidia projected revenues of $8.10 billion (+/-2%) for the first quarter of fiscal 2023 in its last conference call. The company’s data center business, including hyperscale cloud providers, Internet services and others is expected to drive the majority of its revenues.

ETFs in Focus

Let’s delve into each ETF below:

MicroSectors FANG+ ETN (FNGS - Free Report)

MicroSectors FANG+ ETN is linked to the performance of the NYSE FANG+ Index, which is an equal-dollar-weighted index designed to provide exposure to a group of highly traded growth stocks of next-generation technology and tech-enabled companies. It holds 10 equal-weighted stocks in its basket, with Nvidia accounting for a 10% share.

MicroSectors FANG+ ETN has accumulated $50.7 million in its asset base and charges 58 bps in annual fees. It trades in an average daily volume of 27,000 shares and has a Zacks ETF Rank #3 (Hold).

Global X Robotics & Artificial Intelligence ETF (BOTZ - Free Report)

Global X Robotics & Artificial Intelligence ETF 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.

Global X Robotics & Artificial Intelligence ETF has 38 stocks in its basket, with NVIDIA occupying the second spot with a 9.7% share. The ETF has AUM of $1.5 billion and an average daily volume of 730,000 shares. It charges 68 bps in annual fees (read: 5 Top Tech Areas That Deserve Your Attention Now).

VanEck Vectors Semiconductor ETF (SMH - Free Report)

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 8.4%.  

VanEck Vectors Semiconductor ETF has managed assets worth $7.5 billion and charges 35 bps in annual fees and expenses. SMH is heavily traded with a volume of 7.5 million shares per day and has a Zacks ETF Rank #1 (Strong Buy) with a High risk outlook (read: Time for Semiconductor ETFs?).

TrueShares Technology, AI and Deep Learning ETF (LRNZ - Free Report)

TrueShares Technology, AI and Deep Learning ETF is an actively managed fund targeting companies with leading-edge artificial intelligence, machine learning, or deep-learning technology platforms, algorithms, or applications that are believed to provide distinct competitive advantages in an industry historically characterized by a winner-take-all consolidation behavior.

TrueShares Technology, AI and Deep Learning ETF holds 22 stocks in its basket with Nvidia taking the third spot at 7.7% share. It charges 68 bps in fees per year. LRNZ has amassed $17.9 million in its asset base and trades in an average daily volume of 5,000 shares.

Roundhill Ball Metaverse ETF (METV - Free Report)

Roundhill Ball Metaverse ETF is designed to offer investors exposure to the Metaverse by tracking the Ball Metaverse Index. It holds 43 stocks in the basket, with Nvidia occupying the third position at 7.4%. Roundhill Ball Metaverse ETF has key holdings in gaming platforms, computing components, cloud solutions, and social network.

Roundhill Ball Metaverse ETF debuted in the space in June last year and has accumulated $527.6 million in its asset base. METV charges 59 bps in fees per year and trades in an average daily volume of 589,000 shares.