Should You Play NVIDIA Earnings with Bullish ETFs?

NVIDIA shares could see a big move as the AI chip giant reports its quarterly earnings. Read More...
  • (1:30) – Why Are Nvidia’s GPU’s So Important To AI?

  • (11:00) – What Price Target Should Investors Expect From Nvidia Going Forward?

  • (14:50) – Nvidia’s Big Competition: Breaking Down AMD As It Helps With GPU Demand

  • (21:35) – GraniteShares 2x Long NVDA Daily ETF: NVDL

  • (37:35) – Big Takeaways From The Evolving AI Industry

  • [email protected]

In this episode of ETF Spotlight, I speak with Zacks Senior Stock Strategist, Kevin Cook, about NVIDIA NVDA, arguably the most important company in the world right now, and some ETFs that investors could use to capitalize on its earnings.

The AI chip giant is set to report its earnings on May 22, and analysts are racing to raise their price targets ahead of the much-anticipated event.

At its GPU Technology Conference (GTC) in March, NVIDIA launched its next generation of AI chips. CEO Jensen Huang said that these significantly outperform the H100 systems that power generative AI services like ChatGPT.

Thanks to the surge in demand for its AI chips, NVIDIA’s shares have risen more than 90% this year, following a nearly 240% increase in 2023. However, its valuation does not seem overstretched, as earnings are growing faster than its share price.

The stock is currently trading at about 38 times expected earnings, below its five-year median and those of many other chip stocks, including AMD AMD.

NVIDIA currently controls over 80% of the market for cutting-edge chips used to train and run large language models that underpin generative AI.

The largest tech companies, including Microsoft MSFT, Amazon AMZN, Alphabet GOOGL and Meta Platforms META, currently account for more than 40% of NVIDIA’s revenues.

While NVIDIA’s GPUs are unmatched for training AI models, chips from other companies like Intel INTC and AMD can be used for inference after models are trained.

NVIDIA also appears to have a dominant position in the inference market, but it could face competition in the coming years. Additionally, large technology companies are designing their own chips, which could reduce their reliance on NVIDIA.

NVIDIA’s meteoric surge has drawn some investors to single-stock ETFs that aim to double its daily return. The GraniteShares 2x Long NVDA Daily ETF NVDL has about $2 billion in assets, and the T-Rex 2X Long NVIDIA Daily Target ETF NVDX has gathered about $360 million.

I think these instruments can be effectively used as short-term tactical trading tools before or after earnings. However, investors should remember that these products are not meant for buy-and-hold investing and should be used only by those who closely monitor their portfolios.

Tune in to the podcast to learn more.

Make sure to be on the lookout for the next edition of the ETF Spotlight and remember to subscribe! If you have any comments or questions, please email [email protected].

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Amazon.com, Inc. (AMZN) : Free Stock Analysis Report

Intel Corporation (INTC) : Free Stock Analysis Report

Advanced Micro Devices, Inc. (AMD) : Free Stock Analysis Report

Microsoft Corporation (MSFT) : Free Stock Analysis Report

NVIDIA Corporation (NVDA) : Free Stock Analysis Report

Alphabet Inc. (GOOGL) : Free Stock Analysis Report

Meta Platforms, Inc. (META) : Free Stock Analysis Report

GraniteShares 2x Long NVDA Daily ETF (NVDL): ETF Research Reports

T-REX 2X Long NVIDIA Daily Target ETF (NVDX): ETF Research Reports

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