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ETFs to Buy as NVIDIA Marches Toward $6 Trillion Market Cap
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Key Takeaways
NVIDIA's $5.78 trillion market cap is nearing $6 trillion after a fresh all-time high.
NVIDIA's record buyback and 106% revenue growth underscore its strong AI-driven momentum.
ETFs like SHOC and XLK offer heavy NVIDIA exposure while diversifying across tech and semiconductors.
NVIDIA (NVDA - Free Report) has once again captured the market's attention, with its stock surging to a fresh all-time intraday high of $239.86 on Monday, pushing its market capitalization to an estimated $5.78 trillion. This rally follows a period of seven weeks of sideways trading, broken decisively by a combination of factors including the company's announcement of a record $150 billion increase to its share buyback authorization, raising its total repurchase capacity to an impressive $235 billion through fiscal 2028.
The buyback, described as the largest in corporate history, signals management's profound confidence in NVIDIA's long-term growth trajectory and the sustainability of the AI infrastructure boom.
As the world's most valuable publicly traded company inches closer to the unprecedented $6 trillion milestone, NVIDIA currently accounts for a staggering 11% of the Nasdaq Composite and 8% of the S&P 500 Index.
For ETF investors, these developments put the spotlight on the outsized role NVIDIA plays in countless portfolios, making the choice between single-stock exposure and a diversified fund approach more relevant than ever.
Before identifying those ETFs, let's examine NVIDIA's growth prospects for the future and why an ETF investment strategy may prove to be a more prudent approach than buying the stock itself.
Why NVIDIA's Growth Engine is Far from Finished
The factors propelling NVIDIA toward the $6 trillion mark are deeply rooted in its fundamental performance and the broader trajectory of the AI industry.
NVIDIA delivered second-quarter fiscal 2027 revenues of $96.2 billion, a stunning 106% year-over-year increase, primarily driven by its Data Center segment, which witnessed year-over-year revenue growth of 117%.
NVIDIA’s accelerated computing platform remains central to AI training, inference and agentic workloads as customers scale model deployment. To this end, it is imperative to mention that during the fiscal second-quarter earnings call, NVDA’s management stated that its compute is fully utilized across every cloud it serves and expects fiscal 2028 revenues to grow about 70%, with supply constraints limiting growth below customer forecasts.
Meanwhile, NVIDIA is extending its opportunity beyond hardware through software, open models and platform tools to support enterprise deployment. With this aim in view, the company introduced an AI cloud model in the fiscal second quarter that can add revenue sharing from third-party customer usage after the initial infrastructure sale. In September, NVIDIA launched the NVIDIA Open Agent Safety Platform to directly address enterprise deployment challenges by focusing on software-driven AI governance and safety.
On the analyst front, the consensus is overwhelmingly bullish, with the highest price target on Wall Street standing at an ambitious $515. The average price target for NVIDIA sits at $326.07, based on short-term price targets offered by 47 analysts, which represents an upside of 36.5% from the last closing price of $238.90.
The Prudent Case for ETFs Over a Single Stock
While NVIDIA's individual prospects are compelling, the rationale for advocating ETFs over the stock itself lies in the broader industry dynamics and the principle of diversification. NVIDIA's dominance has lifted the entire semiconductor ecosystem, from foundries like Taiwan Semiconductor (TSM - Free Report) to equipment makers like ASML, and from memory specialists like Micron (MU - Free Report) to competitors like Advanced Micro Devices (AMD - Free Report) .
By investing in an ETF, particularly a semiconductor- or tech-focused one, investors can participate in the AI revolution while potentially reducing the impact of any single company's missteps or sector-specific headwinds.
This approach mitigates the idiosyncratic risks associated with a single company, such as competitive pressure from custom chips developed by major customers like Amazon and Google, or the inherent volatility of a stock that has already delivered massive gains.
NVIDIA-Heavy ETFs to Buy
Keeping into account the aforementioned discussion, for those looking to capitalize on NVIDIA's momentum while maintaining a balanced exposure to the industry at large, the following ETFs represent compelling investment choices:
This fund, with net assets of $256.2 million, offers exposure to semiconductor companies. NVDA holds the top position in this fund, with a 21.98% weight. MU and Broadcom (AVGO - Free Report) hold the second and third spots in this fund, with 11.83% and 8.34% weightage, respectively.
SHOC has rallied 68.7% year to date and charges 40 basis points (bps) in fees. It traded at a volume of 0.01 million shares in the last trading session and sports a Zacks ETF Rank #1 (Strong Buy).
This fund, with net assets of $77.51 billion, offers exposure to 26 companies involved in semiconductor production and equipment. NVDA holds the top position in this fund, with a 19.14% weight. TSM and AMD hold the second and third spots in this fund, with 9.24% and 5.56% weightage, respectively.
SMH has surged 76% year to date and charges 35 bps in fees. It traded at a good volume of 3.49 million shares in the last trading session and sports a Zacks ETF Rank #1.
This fund, with net assets worth $27.17 billion, comprises 149 software, semiconductors, and tech hardware companies in the United States. NVDA holds the top position in this fund, with a 17.15% weight. Apple (AAPL - Free Report) and Microsoft (MSFT - Free Report) hold the second and third spots in this fund, with 15.17% and 12.10% weightage, respectively.
IYW has soared 36% year to date and charges 37 bps in fees. It traded at a volume of 0.46 million shares in the last trading session and sports a Zacks ETF Rank #1.
State Street Technology Select Sector SPDR ETF (XLK - Free Report)
This fund, with assets under management worth $131.1 billion, includes 74 companies from technology hardware, storage and peripherals; software; communications equipment; semiconductors and semiconductor equipment; IT services; and electronic equipment, instruments and components industries. NVDA holds the top position in this fund, with a 15.52% weight. AAPL and MSFT hold the second and third spots in this fund, with 13.35% and 10.54% weightage, respectively.
XLK has soared 39.6% year to date and charges 8 bps in fees. It traded at a good volume of 6.59 million shares in the last trading session and sports a Zacks ETF Rank #1.
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ETFs to Buy as NVIDIA Marches Toward $6 Trillion Market Cap
Key Takeaways
NVIDIA (NVDA - Free Report) has once again captured the market's attention, with its stock surging to a fresh all-time intraday high of $239.86 on Monday, pushing its market capitalization to an estimated $5.78 trillion. This rally follows a period of seven weeks of sideways trading, broken decisively by a combination of factors including the company's announcement of a record $150 billion increase to its share buyback authorization, raising its total repurchase capacity to an impressive $235 billion through fiscal 2028.
The buyback, described as the largest in corporate history, signals management's profound confidence in NVIDIA's long-term growth trajectory and the sustainability of the AI infrastructure boom.
As the world's most valuable publicly traded company inches closer to the unprecedented $6 trillion milestone, NVIDIA currently accounts for a staggering 11% of the Nasdaq Composite and 8% of the S&P 500 Index.
For ETF investors, these developments put the spotlight on the outsized role NVIDIA plays in countless portfolios, making the choice between single-stock exposure and a diversified fund approach more relevant than ever.
Before identifying those ETFs, let's examine NVIDIA's growth prospects for the future and why an ETF investment strategy may prove to be a more prudent approach than buying the stock itself.
Why NVIDIA's Growth Engine is Far from Finished
The factors propelling NVIDIA toward the $6 trillion mark are deeply rooted in its fundamental performance and the broader trajectory of the AI industry.
NVIDIA delivered second-quarter fiscal 2027 revenues of $96.2 billion, a stunning 106% year-over-year increase, primarily driven by its Data Center segment, which witnessed year-over-year revenue growth of 117%.
NVIDIA’s accelerated computing platform remains central to AI training, inference and agentic workloads as customers scale model deployment. To this end, it is imperative to mention that during the fiscal second-quarter earnings call, NVDA’s management stated that its compute is fully utilized across every cloud it serves and expects fiscal 2028 revenues to grow about 70%, with supply constraints limiting growth below customer forecasts.
Meanwhile, NVIDIA is extending its opportunity beyond hardware through software, open models and platform tools to support enterprise deployment. With this aim in view, the company introduced an AI cloud model in the fiscal second quarter that can add revenue sharing from third-party customer usage after the initial infrastructure sale. In September, NVIDIA launched the NVIDIA Open Agent Safety Platform to directly address enterprise deployment challenges by focusing on software-driven AI governance and safety.
On the analyst front, the consensus is overwhelmingly bullish, with the highest price target on Wall Street standing at an ambitious $515. The average price target for NVIDIA sits at $326.07, based on short-term price targets offered by 47 analysts, which represents an upside of 36.5% from the last closing price of $238.90.
The Prudent Case for ETFs Over a Single Stock
While NVIDIA's individual prospects are compelling, the rationale for advocating ETFs over the stock itself lies in the broader industry dynamics and the principle of diversification. NVIDIA's dominance has lifted the entire semiconductor ecosystem, from foundries like Taiwan Semiconductor (TSM - Free Report) to equipment makers like ASML, and from memory specialists like Micron (MU - Free Report) to competitors like Advanced Micro Devices (AMD - Free Report) .
By investing in an ETF, particularly a semiconductor- or tech-focused one, investors can participate in the AI revolution while potentially reducing the impact of any single company's missteps or sector-specific headwinds.
This approach mitigates the idiosyncratic risks associated with a single company, such as competitive pressure from custom chips developed by major customers like Amazon and Google, or the inherent volatility of a stock that has already delivered massive gains.
NVIDIA-Heavy ETFs to Buy
Keeping into account the aforementioned discussion, for those looking to capitalize on NVIDIA's momentum while maintaining a balanced exposure to the industry at large, the following ETFs represent compelling investment choices:
Strive U.S. Semiconductor ETF (SHOC - Free Report)
This fund, with net assets of $256.2 million, offers exposure to semiconductor companies. NVDA holds the top position in this fund, with a 21.98% weight. MU and Broadcom (AVGO - Free Report) hold the second and third spots in this fund, with 11.83% and 8.34% weightage, respectively.
SHOC has rallied 68.7% year to date and charges 40 basis points (bps) in fees. It traded at a volume of 0.01 million shares in the last trading session and sports a Zacks ETF Rank #1 (Strong Buy).
VanEck Semiconductor ETF (SMH - Free Report)
This fund, with net assets of $77.51 billion, offers exposure to 26 companies involved in semiconductor production and equipment. NVDA holds the top position in this fund, with a 19.14% weight. TSM and AMD hold the second and third spots in this fund, with 9.24% and 5.56% weightage, respectively.
SMH has surged 76% year to date and charges 35 bps in fees. It traded at a good volume of 3.49 million shares in the last trading session and sports a Zacks ETF Rank #1.
iShares U.S. Technology ETF (IYW - Free Report)
This fund, with net assets worth $27.17 billion, comprises 149 software, semiconductors, and tech hardware companies in the United States. NVDA holds the top position in this fund, with a 17.15% weight. Apple (AAPL - Free Report) and Microsoft (MSFT - Free Report) hold the second and third spots in this fund, with 15.17% and 12.10% weightage, respectively.
IYW has soared 36% year to date and charges 37 bps in fees. It traded at a volume of 0.46 million shares in the last trading session and sports a Zacks ETF Rank #1.
State Street Technology Select Sector SPDR ETF (XLK - Free Report)
This fund, with assets under management worth $131.1 billion, includes 74 companies from technology hardware, storage and peripherals; software; communications equipment; semiconductors and semiconductor equipment; IT services; and electronic equipment, instruments and components industries. NVDA holds the top position in this fund, with a 15.52% weight. AAPL and MSFT hold the second and third spots in this fund, with 13.35% and 10.54% weightage, respectively.
XLK has soared 39.6% year to date and charges 8 bps in fees. It traded at a good volume of 6.59 million shares in the last trading session and sports a Zacks ETF Rank #1.