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NVIDIA Reclaims $5 Trillion Market Cap Crown: ETFs in Focus
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Key Takeaways
NVIDIA jumps 4.3% on April 24, regains $5T valuation, widening $1T lead over Alphabet.
Philadelphia Semiconductor Index on 18-day streak (per Yahoo Finance); lifts Broadcom, Intel, AMD.
NVDA sees $1T AI chip demand by 2027; ETFs SMH, QQQ are in focus.
NVIDIA (NVDA - Free Report) surged 4.3% on Friday to reclaim the $5 trillion market capitalization milestone, according to Yahoo Finance. The rally was fueled by strong momentum in chip stocks, supported by upbeat earnings from Intel (INTC - Free Report) and optimism surrounding a nuclear power partnership with Oklo (OKLO - Free Report) .
NVIDIA now holds a significant lead over Alphabet (GOOG, GOOGL), the second-largest company by market value. The gap between the two has widened to roughly $1 trillion.
Semiconductor Sector Drives Momentum
The broader chip sector has played a key role in NVIDIA’s rally. The Philadelphia Semiconductor Index is currently on an impressive 18-day winning streak, adding substantial value across the industry.
Major semiconductor players benefiting from this surge include Broadcom (AVGO), Taiwan Semiconductor Manufacturing Company (TSM), Micron Technology (MU), Advanced Micro Devices (AMD), Intel (INTC - Free Report) , and Texas Instruments (TXN).
Intel added to the bullish sentiment after its latest earnings report, released Thursday, helped the stock surpass its previous record highs set during the dot-com era.
NVIDIA Views $1 Trillion in Chip Orders by 2027
At its latest annual GTC conference in March, NVIDIA CEO Jensen Huang announced that the company now expects to secure up to $1 trillion in chip orders for its next-generation AI platforms — Blackwell and Rubin — by 2027. This is double the $500 billion forecast Huang had projected last year (read: ETFs to Gain as NVIDIA Views $1 Trillion in Chip Orders by 2027).
Note that NVIDIA is strengthening its position in the artificial intelligence (AI) compute market with the launch of its Vera Rubin platform. Vera Rubin boosts efficiency, reduces GPU requirements, and lowers inference costs compared with the Blackwell architecture.
Analysts Are Bullish on NVDA
Ten out of 14 analysts have raised earnings estimates for the April quarter over the past 60 days, while the Zacks Consensus Estimate for the same period has increased by 15 cents to $1.77 over the past two months.
Impressive Growth Rate
NVIDIA’s earnings are expected to grow by 68.97% this year versus the underlying Semiconductor - General industry’s projected growth rate of 51.34% and the S&P 500’s expected growth of 9.15%. The company’s expected growth rate for next year is also strong at 26.90%, compared with the industry’s 26.90%.
Decent Valuation
NVDA shares have traded at a Price/Earnings (TTM) multiple of 43.57X versus the underlying Semiconductor - General industry’s multiple of 193.24x. Its price-to-cash-flow (MRFY) ratio stands at 44.09X compared with the industry’s 17.57x. However, NVIDIA’s price-to-book (MRQ) ratio remains high at 32.18x versus the industry’s 2.53x.
NVIDIA-Heavy ETFs in Focus
Against this backdrop, investors can play NVIDIA-heavy exchange-traded funds (ETFs) like VanEck Semiconductor ETF (SMH - Free Report) , State Street Technology Select Sector SPDR ETF (XLK - Free Report) , Invesco QQQ (QQQ - Free Report) and iShares Semiconductor ETF (SOXX - Free Report) .
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NVIDIA Reclaims $5 Trillion Market Cap Crown: ETFs in Focus
Key Takeaways
NVIDIA (NVDA - Free Report) surged 4.3% on Friday to reclaim the $5 trillion market capitalization milestone, according to Yahoo Finance. The rally was fueled by strong momentum in chip stocks, supported by upbeat earnings from Intel (INTC - Free Report) and optimism surrounding a nuclear power partnership with Oklo (OKLO - Free Report) .
NVIDIA now holds a significant lead over Alphabet (GOOG, GOOGL), the second-largest company by market value. The gap between the two has widened to roughly $1 trillion.
Semiconductor Sector Drives Momentum
The broader chip sector has played a key role in NVIDIA’s rally. The Philadelphia Semiconductor Index is currently on an impressive 18-day winning streak, adding substantial value across the industry.
Major semiconductor players benefiting from this surge include Broadcom (AVGO), Taiwan Semiconductor Manufacturing Company (TSM), Micron Technology (MU), Advanced Micro Devices (AMD), Intel (INTC - Free Report) , and Texas Instruments (TXN).
Intel added to the bullish sentiment after its latest earnings report, released Thursday, helped the stock surpass its previous record highs set during the dot-com era.
NVIDIA Views $1 Trillion in Chip Orders by 2027
At its latest annual GTC conference in March, NVIDIA CEO Jensen Huang announced that the company now expects to secure up to $1 trillion in chip orders for its next-generation AI platforms — Blackwell and Rubin — by 2027. This is double the $500 billion forecast Huang had projected last year (read: ETFs to Gain as NVIDIA Views $1 Trillion in Chip Orders by 2027).
Note that NVIDIA is strengthening its position in the artificial intelligence (AI) compute market with the launch of its Vera Rubin platform. Vera Rubin boosts efficiency, reduces GPU requirements, and lowers inference costs compared with the Blackwell architecture.
Analysts Are Bullish on NVDA
Ten out of 14 analysts have raised earnings estimates for the April quarter over the past 60 days, while the Zacks Consensus Estimate for the same period has increased by 15 cents to $1.77 over the past two months.
Impressive Growth Rate
NVIDIA’s earnings are expected to grow by 68.97% this year versus the underlying Semiconductor - General industry’s projected growth rate of 51.34% and the S&P 500’s expected growth of 9.15%. The company’s expected growth rate for next year is also strong at 26.90%, compared with the industry’s 26.90%.
Decent Valuation
NVDA shares have traded at a Price/Earnings (TTM) multiple of 43.57X versus the underlying Semiconductor - General industry’s multiple of 193.24x. Its price-to-cash-flow (MRFY) ratio stands at 44.09X compared with the industry’s 17.57x. However, NVIDIA’s price-to-book (MRQ) ratio remains high at 32.18x versus the industry’s 2.53x.
NVIDIA-Heavy ETFs in Focus
Against this backdrop, investors can play NVIDIA-heavy exchange-traded funds (ETFs) like VanEck Semiconductor ETF (SMH - Free Report) , State Street Technology Select Sector SPDR ETF (XLK - Free Report) , Invesco QQQ (QQQ - Free Report) and iShares Semiconductor ETF (SOXX - Free Report) .