Nvidia ETFs to Tap on Upbeat Q4 Earnings
Nvidia NVDA reported blockbuster fourth-quarter fiscal 2022 results after market close yesterday, wherein it outpaced the Zacks Consensus Estimate for both earnings and revenues. The company also offered upbeat guidance for the ongoing quarter.
Despite the robust results, shares of NVIDIA fell nearly 3.4% in pre-market trading on elevated volume. The dip could provide a compelling opportunity to investors seeking to make a play on ETFs having the largest allocation to NVIDIA. These include Simplify Volt Robocar Disruption and Tech ETF VCAR, Global X Robotics & Artificial Intelligence ETF BOTZ, VanEck Vectors Semiconductor ETF SMH, Roundhill Ball Metaverse ETF METV and VanEck Vectors Video Gaming and eSports ETF ESPO.
Nvidia Earnings in Focus
Earnings per share came in at $1.32, beating the Zacks Consensus Estimate of $1.22 and improving 69% from the year-ago earnings. Revenues jumped 53% year over year to a record $7.64 billion and outpaced the consensus mark of $7.43 billion. The strong results were driven by record revenues in gaming, data center and professional visualization market platforms (read: Grab These Video Gaming ETFs to Gain From Soaring Sales Trend).
Gaming revenues climbed 37% year over year to a record $3.42 billion, while data center sales surged 71% to $3.26 billion. Professional visualization revenues spiked 109% to $643 million. Nvidia has enjoyed a strong period of revenue growth during the pandemic as videogame consumption increased and more individuals and businesses started using digital services that run on data centers.
Nvidia provided revenue guidance for the first quarter of fiscal 2023 of $8.10 billion (+/-2%). This is well above the Zacks Consensus Estimate of $7.29 billion. The company’s data center business, including hyperscale cloud providers, Internet services and others is expected to drive majority of revenues.
ETFs in Focus
Let’s delve into each ETF below:
Simplify Volt Robocar Disruption and Tech ETF (VCAR)
Simplify Volt Robocar Disruption and Tech ETF is an actively managed ETF, seeking concentrated exposure to the leader of autonomous driving technology and then enhancing the concentrated exposure with options. It is heavily exposed to the Tesla (TSLA) stock and Tesla call options at 25% share. Beyond Tesla, Nvidia takes the largest 12.5% share in the basket (read: Tesla Posts Record Q4 Revenues: ETFs in Focus).
Simplify Volt Robocar Disruption and Tech ETF seeks to boost its performance during extreme moves in Tesla, charging investors 0.95% in annual fees. It has accumulated $7.9 million in its asset base while trading in an average daily volume of 20,000 shares.
Global X Robotics & Artificial Intelligence ETF (BOTZ)
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 top spot with an 11.8% share. The ETF has AUM of $2.1 billion and an average daily volume of 668,000 shares. It charges 68 bps in annual fees (read: Navigating Thematic ETFs in 2022).
VanEck Vectors Semiconductor ETF (SMH)
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 24 stocks in its basket, with Nvidia occupying the second position at 8.9%.
VanEck Vectors Semiconductor ETF has managed assets worth $8.6 billion and charges 35 basis points (bps) in annual fees and expenses. SMH is heavily traded with a volume of 6.1 million shares per day and has a Zacks ETF Rank #1 (Strong Buy) with a High-risk outlook.
Roundhill Ball Metaverse ETF (METV)
Roundhill Ball Metaverse ETF is designed to offer investors exposure to the Metaverse by tracking the Ball Metaverse Index. It holds 45 stocks in the basket, with Nvidia occupying the top position at 9.1%. Computing components takes the largest share at 19.4%, while cloud solutions, gaming platform and social network round off the next three spots.
Roundhill Ball Metaverse ETF debuted in the space in June last year and has accumulated $831.7 million in its asset base. METV charges 59 bps in fees per year and trades in an average daily volume of 960,000 shares.
VanEck Vectors Video Gaming and eSports ETF (ESPO)
VanEck Video Gaming and eSports ETF 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. ESPO holds 25 stocks, with NVIDIA taking the fourth spot with a 6.9% share. VanEck Video Gaming and eSports ETF is tilted toward American firms, which account for 40.2% of the portfolio, while Japan and China round off the next two with double-digit allocations each.
VanEck Video Gaming and eSports ETF has gathered $508.6 million in its asset base while trading in an average daily volume of 97,000 shares. ESPO charges 55 bps in annual fees from investors.
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NVIDIA Corporation (NVDA) : Free Stock Analysis Report
VanEck Semiconductor ETF (SMH): ETF Research Reports
Global X Robotics & Artificial Intelligence ETF (BOTZ): ETF Research Reports
VanEck Video Gaming and eSports ETF (ESPO): ETF Research Reports
Simplify Volt Robocar Disruption and Tech ETF (VCAR): ETF Research Reports
Roundhill Ball Metaverse ETF (METV): ETF Research Reports
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