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The Zacks Analyst Blog Highlights SMH, WUGI, VCAR, BOTZ and TRFK
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For Immediate Release
Chicago, IL – August 30, 2023 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. ETFs recently featured in the blog include: VanEck Semiconductor ETF (SMH - Free Report) , AXS Esoterica NextG Economy ETF (WUGI - Free Report) , Simplify Volt RoboCar Disruption and Tech ETF (VCAR) , Global X Robotics & Artificial Intelligence ETF (BOTZ - Free Report) and Pacer Data and Digital Revolution ETF (TRFK - Free Report) .
Here are highlights from Tuesday’s Analyst Blog:
NVIDIA ETFs in Focus, Even After +220% YTD
NVIDIA stock is a blockbuster this year, as it has skyrocketed 220.4% courtesy of high hopes from artificial intelligence (AI). A surge in Hyperscale demand and a solid uptake of AI-based smart cockpit infotainment solutions are acting as tailwinds.
No wonder, Nvidia's Q2 earnings were much-awaited and the chipmaker didn't disappoint investors. Yes, Nvidia breezed past analysts' expectations. Not only this, Nvidia said that there will be 170% sales jump in the third quarter thanks to the demand for AI chips (read: Nvidia Earnings Show AI Boom Is Here to Stay: ETFs in Focus).
Inside Nvidia's Huge Success in 2023
The year 2023 can easily be attributed to the AI euphoria. While many began to fear that the AI boom was fully priced in at the current level and that the AI mania would take time to fully materialize, Nvidia's success in Q2 proves otherwise.
NVIDIA rules the AI chip market with over 80% market share, according to some estimates, quoted on CNBC. However, the availability of NVIDIA's chips is currently limited, as major tech giants, cloud service providers, and emerging startups all are eyeing GPU capacity for advancing their individual AI models.
The AI market is thriving with deals and partnerships. Nvidia itself has been entering into numerous partnerships in the AI space. The companies that are collaborating with Nvidia are Amazon, Adobe, Google Cloud, Microsoft, Snowflake and AT&T.
While big tech giants have binged on large language model (LLM) AI, NVIDIA recently revealed a new AI chip that will lower the cost of running LLMs significantly, per a CNBC article. "This processor is designed for the scale-out of the world's data centers," NVIDIA CEO Jensen Huang said Tuesday, CNBC quoted.
How Are NVIDIA's Prospects?
NVIDIA has a Zacks Rank #1 (Strong Buy) and it is a growth and momentum stock. NVIDIA's expected growth rate for current year is expected to be 145.2% versus the semiconductor industry's growth rate of a decline of 4% and the S&P 500's growth rate of positive 8.78%. NVIDIA's expected growth rate for next year is 48.72% versus the expected growth rate of 6.90% for the industry and 16.69% for the S&P 500.
Is Nvidia's Value Quotient Improving?
At the current level, Nvidia shares are trading at the equivalent of around 33 times expected earnings over the next 12 months, according to Refinitiv data, per Reuters. That forward PE compares to over 46 a week ago, and it is now at its lowest since December 2022. More compelling valuation makes Nvidia an intriguing bet.
What Does the Broker Rating Say?
NVIDIA currently has an average brokerage recommendation (ABR)of 1.13 on a scale of 1 to 5 (Strong Buy to Strong Sell), calculated based on the actual recommendations (Buy, Hold, Sell etc.) made by 36 brokerage firms. The current ABR compares to an ABR of 1.24 a month ago based on 35 recommendations.
Of the 36 recommendations deriving the current ABR, 32 are Strong Buy and three are Buy. Strong Buy and Buy respectively account for 88.89% and 8.33% of all recommendations. A month ago, Strong Buy made up 82.86%, while Buy represented 8.57%.
Despite having a "buy" rating on Nvidia, Benchmark Research analyst Cody Acree indicated that Nvidia's dependence on Taiwanese chip foundry (TSMC), which also caters to Apple and other big customers, as a factor that could keep Nvidia from selling as many of its high-end chips as it wants. "It's not just demand, but what they can actually deliver," Acree said, per Reuters, quoted on Yahoo.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
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The Zacks Analyst Blog Highlights SMH, WUGI, VCAR, BOTZ and TRFK
For Immediate Release
Chicago, IL – August 30, 2023 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. ETFs recently featured in the blog include: VanEck Semiconductor ETF (SMH - Free Report) , AXS Esoterica NextG Economy ETF (WUGI - Free Report) , Simplify Volt RoboCar Disruption and Tech ETF (VCAR) , Global X Robotics & Artificial Intelligence ETF (BOTZ - Free Report) and Pacer Data and Digital Revolution ETF (TRFK - Free Report) .
Here are highlights from Tuesday’s Analyst Blog:
NVIDIA ETFs in Focus, Even After +220% YTD
NVIDIA stock is a blockbuster this year, as it has skyrocketed 220.4% courtesy of high hopes from artificial intelligence (AI). A surge in Hyperscale demand and a solid uptake of AI-based smart cockpit infotainment solutions are acting as tailwinds.
No wonder, Nvidia's Q2 earnings were much-awaited and the chipmaker didn't disappoint investors. Yes, Nvidia breezed past analysts' expectations. Not only this, Nvidia said that there will be 170% sales jump in the third quarter thanks to the demand for AI chips (read: Nvidia Earnings Show AI Boom Is Here to Stay: ETFs in Focus).
Inside Nvidia's Huge Success in 2023
The year 2023 can easily be attributed to the AI euphoria. While many began to fear that the AI boom was fully priced in at the current level and that the AI mania would take time to fully materialize, Nvidia's success in Q2 proves otherwise.
NVIDIA rules the AI chip market with over 80% market share, according to some estimates, quoted on CNBC. However, the availability of NVIDIA's chips is currently limited, as major tech giants, cloud service providers, and emerging startups all are eyeing GPU capacity for advancing their individual AI models.
The AI market is thriving with deals and partnerships. Nvidia itself has been entering into numerous partnerships in the AI space. The companies that are collaborating with Nvidia are Amazon, Adobe, Google Cloud, Microsoft, Snowflake and AT&T.
While big tech giants have binged on large language model (LLM) AI, NVIDIA recently revealed a new AI chip that will lower the cost of running LLMs significantly, per a CNBC article. "This processor is designed for the scale-out of the world's data centers," NVIDIA CEO Jensen Huang said Tuesday, CNBC quoted.
How Are NVIDIA's Prospects?
NVIDIA has a Zacks Rank #1 (Strong Buy) and it is a growth and momentum stock. NVIDIA's expected growth rate for current year is expected to be 145.2% versus the semiconductor industry's growth rate of a decline of 4% and the S&P 500's growth rate of positive 8.78%. NVIDIA's expected growth rate for next year is 48.72% versus the expected growth rate of 6.90% for the industry and 16.69% for the S&P 500.
Is Nvidia's Value Quotient Improving?
At the current level, Nvidia shares are trading at the equivalent of around 33 times expected earnings over the next 12 months, according to Refinitiv data, per Reuters. That forward PE compares to over 46 a week ago, and it is now at its lowest since December 2022. More compelling valuation makes Nvidia an intriguing bet.
What Does the Broker Rating Say?
NVIDIA currently has an average brokerage recommendation (ABR)of 1.13 on a scale of 1 to 5 (Strong Buy to Strong Sell), calculated based on the actual recommendations (Buy, Hold, Sell etc.) made by 36 brokerage firms. The current ABR compares to an ABR of 1.24 a month ago based on 35 recommendations.
Of the 36 recommendations deriving the current ABR, 32 are Strong Buy and three are Buy. Strong Buy and Buy respectively account for 88.89% and 8.33% of all recommendations. A month ago, Strong Buy made up 82.86%, while Buy represented 8.57%.
The ABR of 1.13 is pretty upbeat compared with 1.95 ABR held by the semiconductor industry and 9.99 ABR held by the S&P 500.
Any Wall of Worry?
Despite having a "buy" rating on Nvidia, Benchmark Research analyst Cody Acree indicated that Nvidia's dependence on Taiwanese chip foundry (TSMC), which also caters to Apple and other big customers, as a factor that could keep Nvidia from selling as many of its high-end chips as it wants. "It's not just demand, but what they can actually deliver," Acree said, per Reuters, quoted on Yahoo.
ETFs in Focus
Zacks Rank #2 (Buy) VanEck Semiconductor ETF – NVIDIA has 19.84% Focus
AXS Esoterica NextG Economy ETF– NVIDIA has 18.25% Exposure
Simplify Volt RoboCar Disruption and Tech ETF– NVIDIA has 14.05% Exposure
Global X Robotics & Artificial Intelligence ETF– NVIDIA has 13.29% Exposure
Zacks Rank #2 Pacer Data and Digital Revolution ETF – NVIDIA has 13.09% Exposure
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.