Yahoo Finance AI Boom Bolsters NVIDIA's Q1 Growth: ETFs to Tap
NVIDIA NVDA reported blockbuster first-quarter fiscal 2025 results, once again fueling broad optimism in the stock market. It topped both earnings and revenue estimates and offered a bullish revenue outlook for the current quarter, thanks to the solid demand for its artificial intelligence (AI)-enabled GPU chips.
NVIDIA shares jumped as much as 7.8% in after-market trading on blowout results and surpassed the $1,000 level for the first time ever. Investors can tap the robust growth with the help of ETFs having the largest allocation to NVIDIA. These are Strive U.S. Semiconductor ETF SHOC, VanEck Vectors Semiconductor ETF SMH, Grizzle Growth ETF DARP, TrueShares Technology, AI and Deep Learning ETF LRNZ and Invesco PHLX Semiconductor ETF SOXQ.
NVIDIA Earnings in Focus
Earnings per share came in at $6.12, easily surpassing the Zacks Consensus Estimate of $5.49 and up a staggering 461% from the year-ago quarter. Revenues surged 262% year over year to a record $26.04 billion and edged past the consensus mark of $24.33 billion.
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 427% year over year to a record $22.6 billion, buoyed by strong and accelerating demand for generative AI training and inference on the Hopper platform (read: Tech ETFs on a Roll Ahead of NVIDIA Earnings).
NVIDIA has been at the forefront of technology companies' race to build AI into their products and services. NVIDIA founder and CEO Jensen Huang said, “The next industrial revolution has begun — companies and countries are partnering with NVIDIA to shift the trillion-dollar traditional data centers to accelerated computing and build a new type of data center — AI factories — to produce a new commodity: artificial intelligence.”
For the second quarter of fiscal 2025, the graphics chipmaker expects revenues of around $28 billion, plus or minus 2%. This is higher than the Zacks Consensus Estimate of $26.24 billion. The world’s largest chipmaker continues to expect strong sales even as customers await its next-generation GPU chip, Blackwell, set to be released in the second half of the year.
To tap the booming AI demand, NVIDIA announced a 10-to-1 stock split, effective Jun 7. The move will make the stock more accessible to investors and employees and attract individual investors who make small trades. This is because a stock split creates more shares of a company without changing the underlying dollar value of any single investor's holdings. By increasing the number of shares available, the company can attract new investors who might otherwise not be able to afford a single share at a high price.
The AI chipmaker also boosted its quarterly dividend by 150% to 10 cents per share from 4 cents per share. The new dividend will be paid out on Jun 28 to shareholders as of Jun 11 (read: Rate Cut or No Rate Cut, Dividend ETFs You Should Buy).
ETFs to Tap
Let’s delve into each ETF below:
Strive U.S. Semiconductor ETF (SHOC)
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 27% (read: What You Need to Know About NVIDIA ETFs Ahead of Earnings).
Strive U.S. Semiconductor ETF has AUM of $65.3 million and charges 40 bps in annual fees. It trades in a volume of 13,000 shares per day on average and has a Zacks ETF Rank #2 (Buy).
VanEck Vectors Semiconductor ETF (SMH)
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 20.8%.
VanEck Vectors Semiconductor ETF has managed assets worth $20 billion and charges 35 bps in annual fees and expenses. SMH has a Zacks ETF Rank #1 (Strong Buy) with a High risk outlook.
Grizzle Growth ETF (DARP)
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 41 stocks in its basket, with NVIDIA occupying the top position at 19.8% of assets.
Grizzle Growth ETF has accumulated $13.7 million in its asset base and charges 75 bps in annual fees.
TrueShares Technology, AI and Deep Learning ETF (LRNZ)
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 24 stocks in its basket, with NVIDIA taking the top spot at 13.7% share.
LRNZ has amassed $41.3 million in its asset base and trades in an average daily volume of 9,000 shares. It charges 69 bps in fees per year.
Invesco PHLX Semiconductor ETF (SOXQ)
Invesco PHLX Semiconductor ETF offers exposure to the largest U.S.-listed securities of companies engaged in the semiconductor business. It tracks the PHLX Semiconductor Sector Index, holding 30 stocks in its basket. NVIDIA occupies the top position with a 13.4% share in the basket.
Invesco PHLX Semiconductor ETF has accumulated $401.8 million in its asset base. It charges 19 bps in annual fees and trades in an average daily volume of 205,000 shares. Invesco PHLX Semiconductor ETF has a Zacks ETF Rank #1.
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NVIDIA Corporation (NVDA) : Free Stock Analysis Report
VanEck Semiconductor ETF (SMH): ETF Research Reports
TrueShares Technology, AI and Deep Learning ETF (LRNZ): ETF Research Reports
Invesco PHLX Semiconductor ETF (SOXQ): ETF Research Reports
Strive U.S. Semiconductor ETF (SHOC): ETF Research Reports
Grizzle Growth ETF (DARP): ETF Research Reports
