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ETFs in Focus Post Nvidia Q1 Earnings

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Nvidia (NVDA - Free Report) reported solid first-quarter fiscal 2021 results after market close yesterday, wherein it outpaced the Zacks Consensus Estimate on earnings and revenues. However, the company offered a weak guidance for the ongoing quarter.

Earnings per share came in at $1.80, beating the Zacks Consensus Estimate of $1.69 and improving from year-ago earnings of 88 cents. Revenues grew 39% year over year to $3.108 billion and outpaced the consensus mark of $3 billion. The strong results were driven by a surge in data center business, mainly due to massive demand for its chips used in the data centers that power the shift to working remotely because of the new coronavirus outbreak.

In fact, data center sales topped $1 billion for the first time ever in the quarter, representing an 80% increase from the year-ago quarter. Also, gaming revenues rose 27% year over year (read: Video Gaming ETFs Set to Gain on Strong Activision Results).

Nvidia provided revenue guidance for the fiscal second quarter of $3.65 billion (+/-2%). This is below the Zacks Consensus Estimate of $3.37 billion.

As a result, shares of NVIDIA rose 0.4% in after-hours trading on elevated volume. The stock currently has a Zacks Rank #2 (Buy) and a VGM Score of B. It falls within a favorable Zacks industry (placed at the top 18% of 250+ industries).

ETFs to Watch

This has put ETFs with higher allocation to this graphics chipmaker in the spotlight. Below we have highlighted some of the funds:

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

This fund follows the Indxx Global Robotics & Artificial Intelligence Thematic Index, which seeks to invest in companies that potentially stand to benefit from increased adoption and utilization of robotics and AI, including those involved with industrial robotics and automation, non-industrial robots, and autonomous vehicles. It holds 40 stocks in its basket with NVIDIA occupying the top spot holding 13.2%. The ETF has AUM of $1.4 billion and average daily volume of 726,000 shares. It charges 68 bps in annual fees (read: Coronavirus Brightens Outlook for Robotics ETFs).

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 spot with 9.8% share. The fund has amassed $2.8 billion in its asset base and charges a fee of 46 bps a year. It trades in a solid volume of 922,000 shares and has a Zacks ETF Rank #1 (Strong Buy) with a High risk outlook.

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. Holding 25 stocks in its basket, NVIDIA takes the top spot with 8.6% share. American firms account for one-third of the portfolio, while Japan and China round off the next two with double-digit allocation each. The fund has gathered $213.1 million in its asset base while trading in average daily volume of 71,000 shares. It charges 55 bps in annual fees from investors.

Global X Video Games & Esports ETF (HERO - Free Report)

This ETF offers exposure to companies that develop or publish video games, facilitate the streaming and distribution of video gaming or esports content, own and operate within competitive esports leagues, or produce hardware used in video games and esports, including augmented and virtual reality. This can be easily done by the Solactive Video Games & Esports Index. Holding 41 securities in its basket, NVIDIA is the second firm accounting for 7.3% of assets. With AUM of $109.8 million, the fund charges 50 bps in annual fees and trades in average daily volume of 51,000 shares.

VanEck Vectors Semiconductor ETF (SMH - Free Report)

This ETF has AUM of $1.9 billion and average daily volume of about 4.9 million shares. The fund provides exposure to 25 global semiconductor securities by tracking the MVIS US Listed Semiconductor 25 Index. NVIDIA occupies the third spot with 7.4% of the assets. While the American firms dominate the fund’s holdings with 76.2% assets, Taiwan (12.1%), the Netherlands (9%) and Switzerland (2.7%) capture the top four slots in terms of its country exposure. The fund has an expense ratio of 0.35%. It has a Zacks ETF Rank #1 with a High risk outlook (read: What Awaits Semiconductor ETFs in Post-Lockdown World?).

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