Nvidia Misses Q3 Earnings, Shares Up: ETFs in Focus

Nvidia NVDA disappointed investors with its third-quarter fiscal 2023 results, wherein it missed earnings estimates and forecast weakness in revenues for the ongoing quarter. However, fiscal third-quarter revenues beat estimates.

Despite the earnings miss and dismal guidance, Nvidia shares gained 2.2% in after-market trading on elevated volume. This has put ETFs having the largest allocation to NVIDIA in focus. These include Roundhill Ball Metaverse ETF METV, Pacer Data and Digital Revolution ETF TRFK, VanEck Vectors Semiconductor ETF SMH, VanEck Vectors Video Gaming and eSports ETF ESPO and The Spear Alpha ETF SPRX.

Nvidia Earnings in Focus

Earnings per share came in at 34 cents, missing the Zacks Consensus Estimate of 44 cents and declining 50% from the year-ago earnings. Revenues dropped 17% year over year to $5.93 billion but edged past the consensus mark of $5.81 billion. Higher-than-expected revenues were driven by strong demand in its data center business on the back of rising cloud adoption.

Data center revenues rose 31% year over year, while gaming revenues were down 51% from a year ago (read: 5 Sector ETFs to Play for Revenue Growth Potential).

For the fourth quarter of fiscal 2023, the graphics chipmaker expects revenues of around $6 billion, plus or minus 2%. This is well below the Zacks Consensus Estimate of $6.23 billion. Nvidia believes demand for its artificial intelligence and data-center chips will remain strong though it continues to struggle with a slowdown in the personal computer market.

ETFs in Focus

Let’s delve into each ETF below:

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 10.1%. Roundhill Ball Metaverse ETF has key holdings in gaming platforms, cloud solutions, computing components, and social networks.

Roundhill Ball Metaverse ETF debuted in the space in June last year and has accumulated $417.7 million in its asset base. METV charges 59 bps in fees per year and trades in an average daily volume of 305,000 shares.

Pacer Data and Digital Revolution ETF (TRFK)

Pacer Data and Digital Revolution ETF aims to offer investors exposure to the globally listed stocks and depositary receipts of data and digital revolution companies. It follows the Pacer Data Transmission and Communication Revolution Index, holding 83 stocks in its basket. Out of these, Nvidia is the top firm, accounting for a 9.8% share. Semiconductors take the largest share at 29.1%, while system software and communication equipment round off the next two spots.

Pacer Data and Digital Revolution ETF debuted in the space in June and has accumulated $0.9 million in its asset base. It has an expense ratio of 0.60%. TRFK trades in a meager volume of under 500 shares per day on average.

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 25 stocks in its basket, with Nvidia occupying the second position at 9.1% (read: 5 Tech ETFs At the Heart of Last Week's Rally).  

VanEck Vectors Semiconductor ETF has managed assets worth $6.8 billion and charges 35 bps in annual fees and expenses. SMH is heavily traded with a volume of 5 million shares per day and has a Zacks ETF Rank #1 (Strong Buy) with a High risk outlook.

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 top spot with an 8.9% share. VanEck Video Gaming and eSports ETF is inclined toward American firms, which account for 42% of the portfolio, while Japan and China round off the next two with a double-digit allocation each.

VanEck Video Gaming and eSports ETF has gathered $257.4 million in its asset base while trading in an average daily volume of 40,000 shares. ESPO charges 55 bps in annual fees from investors.

The Spear Alpha ETF (SPRX)

The Spear Alpha ETF is an actively managed fund that invests in companies poised to benefit from breakthrough trends in industrial technology. The ETF’s objective is to find underappreciated opportunities across different industrial supply chains that are beneficiaries of secular themes such as environmental focus and decarbonization, manufacturing digitalization, automation & robotics, photonics and additive manufacturing, space exploration, and artificial intelligence. The Spear Alpha ETF holds 20 stocks in its basket, with Nvidia taking the third spot at 8.7% share (read: Tech ETF Winners Amid Big Tech's Acute Slump Last Week).

The Spear Alpha ETF has accumulated $3.1 million in its asset base since its inception in August and charges 75 bps in annual fees. It trades in an average daily volume of 1,000 shares.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
NVIDIA Corporation (NVDA) : Free Stock Analysis Report
 
VanEck Semiconductor ETF (SMH): ETF Research Reports
 
VanEck Video Gaming and eSports ETF (ESPO): ETF Research Reports
 
Spear Alpha ETF (SPRX): ETF Research Reports
 
Roundhill Ball Metaverse ETF (METV): ETF Research Reports
 
Pacer Data and Digital Revolution ETF (TRFK): ETF Research Reports
 
To read this article on Zacks.com click here.
 
Zacks Investment Research