Nvidia (NASDAQ:NVDA)'s recent blockbuster Q2 fiscal 2024 earnings release on August 23 made a significant impact not just on the company’s individual stock, but also on a select group of NYSE-listed ETFs that feature Nvidia in their top five holdings.
The semiconductor giant announced a record $13.51 billion in revenue, representing an increase of 101% year-over-year, and 88% from the last quarter, largely driven by high revenue growth from their Data Center segment. Nvidia also boasted a GAAP earnings per share of $2.48, up an eye-watering 854% from a year ago and 202% from the previous quarter.
Jensen Huang, the company’s CEO, attributed this monumental performance to the advent of a "new computing era," driven by accelerated computing and generative AI, a trend that is sweeping across companies worldwide. Key to this was demand for Nvidia's AI infrastructure.
The company also continued to pay its modest quarterly cash dividend ($0.04 per share right now) and approved another $25 billion in share buybacks to continue throughout the fiscal year.
This robust report had an immediate impact on Nvidia’s stock price, which rose in after-hours trading from $469 to $511 per share, before shedding most of its gains to hover around $468 as of August 28. Today, Nvidia sits firmly at some $1.16 trillion in market capitalization.
The volatility also rippled across various technology and semiconductor ETFs listed on the NYSE, giving investors a front-row seat to the impact of Nvidia's performance on broader investment vehicles.
Here are three ETFs that offer a compelling avenue for investors to attain concentrated exposure to Nvidia, while also hedging their bets among its sector peers and competitors.
SPDR NYSE Technology ETF (XNTK)
With just $545 million in assets under management, or AUM, XNTK trails most of the more well-known technology sector ETFs. However, this ETF still has some noteworthy features investors may like. By tracking the NYSE Technology Index, XNTK provides exposure to 35 stocks from not only the technology sector, but also technology related ones from the consumer discretionary sector.
In addition, XNTK also imposes some growth screeners, by requiring constituents to meet at least one of three criteria: an increase in sales over the trailing year, a maximum of one consecutive quarter of negative sales over the last two years or have revenue from the last four quarters rank in the top 75 of its peers from the same industry classification.
Exposure to Nvidia as of August 25: 5.74%
Expense ratio: 0.35%
Invesco PHLX Semiconductors ETF (SOXQ)
The two most popular semiconductor focused ETFs on the market, the iShares Semiconductor ETF (SOXX) and the VanEck Semiconductor ETF (SMH) are both listed on the Nasdaq exchange and collectively boast some $17 billion in AUM. With an expense ratio of 0.35%, both ETFs are affordable, but not rock-bottom in terms of price. For cost conscious investors, there is an alternative.
Meet SOXQ, which tracks the PHLX Semiconductor Sector Index, holding 30 U.S. listed semiconductor stocks weighted by market capitalization. At a 0.19% expense ratio, this ETF significantly undercuts both SOXX and SMH in terms of affordability, while providing exposure to a recognized industry benchmark. So far, the ETF has attracted around $141 million in AUM.
Exposure to Nvidia as of August 25: 9.59%
Expense ratio: 0.19%
Invesco S&P 500 Top 50 ETF (XLG)
Nvidia's new one trillion plus market capitalization puts it squarely among the likes of Apple (NASDAQ:AAPL), Microsoft (NASDAQ:MSFT), Alphabet (NASDAQ:GOOGL), and Amazon (NASDAQ:AMZN) when it comes to the largest companies in the U.S. Therefore, a mega-cap index ETF like XLG can be a great way of obtaining Nvidia exposure while still diversifying among some of the largest U.S. listed companies from a variety of sectors.
XLG's benchmark, the S&P 500 Top 50 Index does what its name suggests – hold the top 50 stocks by market capitalization in the broader S&P 500 index. At a 0.2% expense ratio, investors get exposure to some of the most dominant mega-caps in the market today, with a significant 39% tilt to technology sector equities. So far, XLG has attracted around $2.4 billion in AUM.
Exposure to Nvidia as of August 25: 5.47%
Expense ratio: 0.20%
This content was originally published by our partners at ETF Central.