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Nvidia Triples Revenues on AI Chip Boom: ETFs to Buy
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Nvidia (NVDA - Free Report) reported blockbuster third-quarter fiscal 2024 results, demonstrating robust growth and setting new records for revenues and earnings. It topped both earnings and revenue estimates and offered a bullish revenue outlook for the current quarter on booming artificial intelligence (AI) demand for its high-powered chips.
Despite the blowout results, Nvidia shares dipped 1% in after-market trading on concerns about trade restrictions. Investors could tap the robust results with the help of ETFs having the largest allocation to NVIDIA. These include GraniteShares 1.5x Long NVDA Daily ETF (NVDL - Free Report) , VanEck Vectors Semiconductor ETF (SMH - Free Report) , AXS Esoterica NextG Economy ETF (WUGI - Free Report) , Global X Robotics & Artificial Intelligence ETF (BOTZ - Free Report) and Pacer Data and Digital Revolution ETF (TRFK - Free Report) (read: Nvidia's All-Time High Before Earnings: ETFs in Focus).
Nvidia Earnings in Focus
Earnings per share came in at $4.02, outpacing the Zacks Consensus Estimate of $3.36 and up more than threefold from the year-ago quarter. Revenues jumped 206% year over year to a record $18.12 billion and edged past the consensus mark of $16.19 billion.
The growth was powered by the company's Data Center segment, which alone contributed $14.5 billion to revenues, up 279% year over year. Gaming revenues rose 15% year over year to $2.86 billion.
Jensen Huang, the founder and CEO of NVIDIA, attributed the strong growth to the industry's transition from general-purpose to accelerated computing and generative AI. He emphasized the role of NVIDIA's GPUs, CPUs, networking, AI foundry services and NVIDIA AI Enterprise software as key drivers of growth.
For the fourth quarter of fiscal 2024, the graphics chipmaker expects revenues of around $20 billion, plus or minus 2%. This is much higher than the Zacks Consensus Estimate of $17.85 billion. The world’s largest chipmaker continues to benefit from the explosive demand for its cutting-edge chips used in AI applications, which are used to power ChatGPT and many similar services, and is boosting supply to meet surging demand. Nvidia's chips are used in applications ranging from robotics and the metaverse to medical imaging and video analytics.
However, new restrictions on chip exports to China implemented by the Biden Administration would weigh on results. The chip designer expects a steep drop in fourth-quarter sales in China — a key revenue generator — in the wake of new U.S. rules.
Investors should note that Nvidia has risen about 240% so far this year, widely outperforming the S&P 500’s rise of 18% (read: 5 ETFs to Tap Nvidia's Historic Surge).
GraniteShares 1.5x Long NVDA Daily ETF magnifies exposure to a single trade, seeking 1.5 times (150%) the daily percentage change of the common stock of NVIDIA. It has an expense ratio of 1.15% and trades in a volume of 603,000 shares a day on average. GraniteShares 1.5x Long NVDA Daily ETF has amassed $253.9 million in its asset base.
VanEck Vectors Semiconductor ETF offers exposure to 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 26 stocks in its basket, with Nvidia occupying the top position at 20.1%.
VanEck Vectors Semiconductor ETF has managed assets worth $11.1 billion and charges 35 bps in annual fees and expenses. SMH is heavily traded with a volume of 9 million shares per day and has a Zacks ETF Rank #1 with a High risk outlook (read: Tech Turns Hot, ETFs Touch New 52-Week Highs).
AXS Esoterica NextG Economy ETF is an actively managed ETF that invests in stocks of companies that benefit from the ever-evolving digital economy. It holds 33 stocks in the basket, with Nvidia occupying the top position at 20.1%.
AXS Esoterica NextG Economy ETF has accumulated $22.8 million in its asset base and charges 75 bps in fees per year. It trades in an average daily volume of 2,000 shares.
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 (read: Guide to Artificial Intelligence ETFs).
Global X Robotics & Artificial Intelligence ETF has 44 stocks in its basket, with NVIDIA occupying the top spot with a 15.6% share. The ETF has AUM of $2 billion and an average daily volume of 848,000 shares. It charges 69 bps in annual fees.
Pacer Data and Digital Revolution ETF aims to offer investors exposure to the globally listed stocks and depositary receipts of data and digital revolution companies. It follows the Pacer Data Transmission and Communication Revolution Index, holding 80 stocks in its basket. Out of these, Nvidia is the top firm, accounting for a 10% share.
Pacer Data and Digital Revolution ETF has accumulated $5.3 million in its asset base. It has an expense ratio of 0.60%. TRFK trades in a meager volume of about 1,000 shares per day on average.
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Nvidia Triples Revenues on AI Chip Boom: ETFs to Buy
Nvidia (NVDA - Free Report) reported blockbuster third-quarter fiscal 2024 results, demonstrating robust growth and setting new records for revenues and earnings. It topped both earnings and revenue estimates and offered a bullish revenue outlook for the current quarter on booming artificial intelligence (AI) demand for its high-powered chips.
Despite the blowout results, Nvidia shares dipped 1% in after-market trading on concerns about trade restrictions. Investors could tap the robust results with the help of ETFs having the largest allocation to NVIDIA. These include GraniteShares 1.5x Long NVDA Daily ETF (NVDL - Free Report) , VanEck Vectors Semiconductor ETF (SMH - Free Report) , AXS Esoterica NextG Economy ETF (WUGI - Free Report) , Global X Robotics & Artificial Intelligence ETF (BOTZ - Free Report) and Pacer Data and Digital Revolution ETF (TRFK - Free Report) (read: Nvidia's All-Time High Before Earnings: ETFs in Focus).
Nvidia Earnings in Focus
Earnings per share came in at $4.02, outpacing the Zacks Consensus Estimate of $3.36 and up more than threefold from the year-ago quarter. Revenues jumped 206% year over year to a record $18.12 billion and edged past the consensus mark of $16.19 billion.
The growth was powered by the company's Data Center segment, which alone contributed $14.5 billion to revenues, up 279% year over year. Gaming revenues rose 15% year over year to $2.86 billion.
Jensen Huang, the founder and CEO of NVIDIA, attributed the strong growth to the industry's transition from general-purpose to accelerated computing and generative AI. He emphasized the role of NVIDIA's GPUs, CPUs, networking, AI foundry services and NVIDIA AI Enterprise software as key drivers of growth.
For the fourth quarter of fiscal 2024, the graphics chipmaker expects revenues of around $20 billion, plus or minus 2%. This is much higher than the Zacks Consensus Estimate of $17.85 billion. The world’s largest chipmaker continues to benefit from the explosive demand for its cutting-edge chips used in AI applications, which are used to power ChatGPT and many similar services, and is boosting supply to meet surging demand. Nvidia's chips are used in applications ranging from robotics and the metaverse to medical imaging and video analytics.
However, new restrictions on chip exports to China implemented by the Biden Administration would weigh on results. The chip designer expects a steep drop in fourth-quarter sales in China — a key revenue generator — in the wake of new U.S. rules.
Investors should note that Nvidia has risen about 240% so far this year, widely outperforming the S&P 500’s rise of 18% (read: 5 ETFs to Tap Nvidia's Historic Surge).
ETFs to Tap
Let’s delve into each ETF below:
GraniteShares 1.5x Long NVDA Daily ETF (NVDL - Free Report)
GraniteShares 1.5x Long NVDA Daily ETF magnifies exposure to a single trade, seeking 1.5 times (150%) the daily percentage change of the common stock of NVIDIA. It has an expense ratio of 1.15% and trades in a volume of 603,000 shares a day on average. GraniteShares 1.5x Long NVDA Daily ETF has amassed $253.9 million in its asset base.
VanEck Vectors Semiconductor ETF (SMH - Free Report)
VanEck Vectors Semiconductor ETF offers exposure to 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 26 stocks in its basket, with Nvidia occupying the top position at 20.1%.
VanEck Vectors Semiconductor ETF has managed assets worth $11.1 billion and charges 35 bps in annual fees and expenses. SMH is heavily traded with a volume of 9 million shares per day and has a Zacks ETF Rank #1 with a High risk outlook (read: Tech Turns Hot, ETFs Touch New 52-Week Highs).
AXS Esoterica NextG Economy ETF (WUGI - Free Report)
AXS Esoterica NextG Economy ETF is an actively managed ETF that invests in stocks of companies that benefit from the ever-evolving digital economy. It holds 33 stocks in the basket, with Nvidia occupying the top position at 20.1%.
AXS Esoterica NextG Economy ETF has accumulated $22.8 million in its asset base and charges 75 bps in fees per year. It trades in an average daily volume of 2,000 shares.
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 (read: Guide to Artificial Intelligence ETFs).
Global X Robotics & Artificial Intelligence ETF has 44 stocks in its basket, with NVIDIA occupying the top spot with a 15.6% share. The ETF has AUM of $2 billion and an average daily volume of 848,000 shares. It charges 69 bps in annual fees.
Pacer Data and Digital Revolution ETF (TRFK - Free Report)
Pacer Data and Digital Revolution ETF aims to offer investors exposure to the globally listed stocks and depositary receipts of data and digital revolution companies. It follows the Pacer Data Transmission and Communication Revolution Index, holding 80 stocks in its basket. Out of these, Nvidia is the top firm, accounting for a 10% share.
Pacer Data and Digital Revolution ETF has accumulated $5.3 million in its asset base. It has an expense ratio of 0.60%. TRFK trades in a meager volume of about 1,000 shares per day on average.