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NVIDIA (NVDA - Free Report) reported robust second-quarter fiscal 2025 results. The AI darling topped both earnings and revenue estimates and offered a bullish revenue outlook for the current quarter but failed to live up to investors’ lofty expectations (read: NVIDIA's Stock Awaiting $300 Billion Impact? ETFs in Focus).
NVIDIA shares tumbled about 7% in after-market trading and lost $200 billion in stock market value. Investors could tap the dip in the stock, with ETFs having the largest allocation to the AI chipmaker, given its growth potential. Blackwell is expected to generate a fresh wave of growth when it rolls out in the coming months. Strive U.S. Semiconductor ETF (SHOC - Free Report) , VanEck Vectors Semiconductor ETF (SMH - Free Report) , Technology Select Sector SPDR Fund (XLK - Free Report) , Grizzle Growth ETF (DARP - Free Report) and TrueShares Technology, AI and Deep Learning ETF (LRNZ - Free Report) could be compelling options.
NVIDIA Earnings in Focus
Earnings per share came in at 68 cents, easily surpassing the Zacks Consensus Estimate of 64 cents and up a massive 152% from the year-ago quarter. This represents the seventh straight quarter of earnings beat. Revenues surged 122% year over year to a record $30 billion and edged past the consensus mark of $28.4 billion. This marks the fourth consecutive quarter of triple-digit percentage year-over-year top-line growth.
The blockbuster results were driven by incredible demand for NVIDIA’s electric circuits, known as graphics processing units (GPUs), and data centers. Data Center revenues jumped 154% year over year to $26.3 billion, buoyed by strong and accelerating demand for generative AI training and inference on the Hopper platform.
Solid Growth Path Ahead
NVIDIA is the world leader in AI chip design and software, controlling between 80% and 95% of the market, according to Reuters. It has been key to the current AI trade on Wall Street, with almost half of its revenues tied directly to tech giants like Microsoft (MSFT), Amazon (AMZN), Google (GOOGL) and Meta (META).
The AI chipmaker expects shipments of its current Hopper chips to "increase" in the second half of the year. CEO Jensen Huang also said NVIDIA expects the data center business to grow "quite significantly next year," and that "Blackwell is going to be a complete game changer for the industry" despite concerns over its production delays that could push back deliveries and impact its revenues in the next few quarters. NVIDIA expects "several billion dollars" from Blackwell sales as production ramps up in the fourth quarter (read: 5 Technology ETFs at the Forefront of the August Rebound).
For the third quarter of fiscal 2025, the graphics chipmaker expects revenues of around $32.5 billion, plus or minus 2%. This is higher than the Zacks Consensus Estimate of $30.97 billion.
NVIDIA also announced a $50 billion increase in its share buyback authorization.
Strive U.S. Semiconductor ETF seeks broad market exposure to the U.S. semiconductor sector. It follows the Bloomberg US Listed Semiconductors Select Total Return Index and holds 32 stocks in its basket, with NVIDIA accounting for the top firm at 29.6%.
Strive U.S. Semiconductor ETF has AUM of $79.7 million and charges 40 bps in annual fees. It trades in a volume of 51,000 shares per day on average and has a Zacks ETF Rank #2 (Buy).
VanEck Vectors Semiconductor ETF offers exposure to companies involved in semiconductor production and equipment. It 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 26 stocks in its basket, with NVIDIA occupying the top position at 22%.
VanEck Vectors Semiconductor ETF has managed assets worth $22.8 billion and charges 35 bps in annual fees and expenses. It trades in average daily volume of 9 million shares and has a Zacks ETF Rank #1 (Strong Buy) with a High risk outlook.
Select Sector SPDR Technology ETF is the most popular and liquid ETF in the technology space, with AUM of $69.8 billion and an average daily volume of 5 million shares. It offers broad exposure to the technology sector and follows the Technology Select Sector Index. Select Sector SPDR Technology ETF holds about 67 securities in its basket, with NVIDIA occupying the top position at 21.5% (read: 5 Technology ETFs at the Forefront of the August Rebound).
Select Sector SPDR Technology ETF charges 9 bps in fees per year from investors and has a Zacks ETF Rank #1 with a Medium risk outlook.
Grizzle Growth ETF is an actively managed ETF that seeks long-term capital appreciation through companies focused on growth, innovation and disruption. It seeks to identify future leaders in key growth themes, including Digitization and Cloud Computing, Future Media and Entertainment, Health and Wellness, and Sustainability and Energy Transition. Grizzle Growth ETF holds 38 stocks in its basket, with NVIDIA occupying the top position at 20.5% of assets.
Grizzle Growth ETF has accumulated $13.9 million in its asset base and charges 75 bps in annual fees.
TrueShares Technology, AI and Deep Learning ETF (LRNZ - Free Report)
TrueShares Technology, AI and Deep Learning ETF is an actively managed fund targeting companies that are significantly involved in the application of high levels of artificial intelligence. It holds 23 stocks in its basket, with NVIDIA taking the top spot at 15.1% share.
LRNZ has amassed $37.3 million in its asset base and trades in an average daily volume of 10,000 shares. It charges 69 bps in fees per year.
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Buy the NVIDIA Dip with ETFs?
NVIDIA (NVDA - Free Report) reported robust second-quarter fiscal 2025 results. The AI darling topped both earnings and revenue estimates and offered a bullish revenue outlook for the current quarter but failed to live up to investors’ lofty expectations (read: NVIDIA's Stock Awaiting $300 Billion Impact? ETFs in Focus).
NVIDIA shares tumbled about 7% in after-market trading and lost $200 billion in stock market value. Investors could tap the dip in the stock, with ETFs having the largest allocation to the AI chipmaker, given its growth potential. Blackwell is expected to generate a fresh wave of growth when it rolls out in the coming months. Strive U.S. Semiconductor ETF (SHOC - Free Report) , VanEck Vectors Semiconductor ETF (SMH - Free Report) , Technology Select Sector SPDR Fund (XLK - Free Report) , Grizzle Growth ETF (DARP - Free Report) and TrueShares Technology, AI and Deep Learning ETF (LRNZ - Free Report) could be compelling options.
NVIDIA Earnings in Focus
Earnings per share came in at 68 cents, easily surpassing the Zacks Consensus Estimate of 64 cents and up a massive 152% from the year-ago quarter. This represents the seventh straight quarter of earnings beat. Revenues surged 122% year over year to a record $30 billion and edged past the consensus mark of $28.4 billion. This marks the fourth consecutive quarter of triple-digit percentage year-over-year top-line growth.
The blockbuster results were driven by incredible demand for NVIDIA’s electric circuits, known as graphics processing units (GPUs), and data centers. Data Center revenues jumped 154% year over year to $26.3 billion, buoyed by strong and accelerating demand for generative AI training and inference on the Hopper platform.
Solid Growth Path Ahead
NVIDIA is the world leader in AI chip design and software, controlling between 80% and 95% of the market, according to Reuters. It has been key to the current AI trade on Wall Street, with almost half of its revenues tied directly to tech giants like Microsoft (MSFT), Amazon (AMZN), Google (GOOGL) and Meta (META).
The AI chipmaker expects shipments of its current Hopper chips to "increase" in the second half of the year. CEO Jensen Huang also said NVIDIA expects the data center business to grow "quite significantly next year," and that "Blackwell is going to be a complete game changer for the industry" despite concerns over its production delays that could push back deliveries and impact its revenues in the next few quarters. NVIDIA expects "several billion dollars" from Blackwell sales as production ramps up in the fourth quarter (read: 5 Technology ETFs at the Forefront of the August Rebound).
For the third quarter of fiscal 2025, the graphics chipmaker expects revenues of around $32.5 billion, plus or minus 2%. This is higher than the Zacks Consensus Estimate of $30.97 billion.
NVIDIA also announced a $50 billion increase in its share buyback authorization.
ETFs to Tap
Strive U.S. Semiconductor ETF (SHOC - Free Report)
Strive U.S. Semiconductor ETF seeks broad market exposure to the U.S. semiconductor sector. It follows the Bloomberg US Listed Semiconductors Select Total Return Index and holds 32 stocks in its basket, with NVIDIA accounting for the top firm at 29.6%.
Strive U.S. Semiconductor ETF has AUM of $79.7 million and charges 40 bps in annual fees. It trades in a volume of 51,000 shares per day on average and has a Zacks ETF Rank #2 (Buy).
VanEck Vectors Semiconductor ETF (SMH - Free Report)
VanEck Vectors Semiconductor ETF offers exposure to companies involved in semiconductor production and equipment. It 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 26 stocks in its basket, with NVIDIA occupying the top position at 22%.
VanEck Vectors Semiconductor ETF has managed assets worth $22.8 billion and charges 35 bps in annual fees and expenses. It trades in average daily volume of 9 million shares and has a Zacks ETF Rank #1 (Strong Buy) with a High risk outlook.
Select Sector SPDR Technology ETF (XLK - Free Report)
Select Sector SPDR Technology ETF is the most popular and liquid ETF in the technology space, with AUM of $69.8 billion and an average daily volume of 5 million shares. It offers broad exposure to the technology sector and follows the Technology Select Sector Index. Select Sector SPDR Technology ETF holds about 67 securities in its basket, with NVIDIA occupying the top position at 21.5% (read: 5 Technology ETFs at the Forefront of the August Rebound).
Select Sector SPDR Technology ETF charges 9 bps in fees per year from investors and has a Zacks ETF Rank #1 with a Medium risk outlook.
Grizzle Growth ETF (DARP - Free Report)
Grizzle Growth ETF is an actively managed ETF that seeks long-term capital appreciation through companies focused on growth, innovation and disruption. It seeks to identify future leaders in key growth themes, including Digitization and Cloud Computing, Future Media and Entertainment, Health and Wellness, and Sustainability and Energy Transition. Grizzle Growth ETF holds 38 stocks in its basket, with NVIDIA occupying the top position at 20.5% of assets.
Grizzle Growth ETF has accumulated $13.9 million in its asset base and charges 75 bps in annual fees.
TrueShares Technology, AI and Deep Learning ETF (LRNZ - Free Report)
TrueShares Technology, AI and Deep Learning ETF is an actively managed fund targeting companies that are significantly involved in the application of high levels of artificial intelligence. It holds 23 stocks in its basket, with NVIDIA taking the top spot at 15.1% share.
LRNZ has amassed $37.3 million in its asset base and trades in an average daily volume of 10,000 shares. It charges 69 bps in fees per year.