Nvidia (NVDA) is set to report its fiscal Q2 earnings on August 27, and Wall Street is buzzing with optimism. Top analysts from Wedbush, Evercore ISI, and KeyBanc, among others, have reaffirmed a Buy rating and raised their price targets, implying upside of 10% or more. Thus, this may present a buying opportunity for investors, especially through exchange-traded funds (ETFs) that offer diversified exposure to NVDA without the risk of holding the stock directly.
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The chipmaker is expected to post Q2 revenue of around $45.94 billion and earnings of $1.00 per share. This reflects a 53% jump in revenue and a 47% EPS gain year-over-year, driven by surging demand from hyperscalers such as Meta (META), Alphabet (GOOGL), and Microsoft (MSFT).
Investors seeking exposure to NVDA stock may consider VanEck Semiconductor ETF (SMH) and iShares Global Tech ETF (IXN). Let’s take a deeper look at these two ETFs.
VanEck Semiconductor ETF
The SMH ETF tracks the performance of the MVIS U.S. Listed Semiconductor 25 Index, which includes companies involved in semiconductor production and equipment. The ETF provides exposure to UnitedHealth stock alongside other major players like Taiwan Semiconductor Manufacturing (TSM), Broadcom (AVGO), and Advanced Micro Devices (AMD). Importantly, NVDA accounts for 22.13% of the SMH ETF’s total holdings.
Overall, the ETF has $26.56 billion in assets under management (AUM). Also, it has an expense ratio of 0.35%. Over the past three months, the SMH ETF has generated a return of 19.87%.
On TipRanks, SMH has a Strong Buy consensus rating based on 22 Buys and four Holds assigned in the last three months. At $325, the average SMH ETF price target implies 10.68% upside potential.
iShares Global Tech ETF
The IXN ETF offers investors targeted access to the world’s largest and most influential technology companies. It tracks the S&P Global 1200 Information Technology Index, which includes firms across software, hardware, semiconductors, and IT services.
NVDA stock constitutes 19.87% of the ETF’s holdings. Apart from Nvidia, some of the top stocks in the IXN ETF are Microsoft, Apple (AAPL), and Oracle (ORCL). Overall, the ETF has $5.68 billion in AUM. Also, it has an expense ratio of 0.39%. The IXN ETF has gained 12.14% in the past three months.
Turning to Wall Street, the ETF has a Moderate Buy consensus rating. Of the 120 stocks held, 87 have Buys and 33 have Holds. At $108.63, the average IXN ETF price target implies a 13.35% upside potential.
Concluding Thoughts
ETFs provide indirect exposure to NVDA stock, reducing risk compared to investing directly in the stock. Furthermore, ETFs are a liquid and transparent way to participate in the market. Investors seeking ETF recommendations might consider IXN and SMH, as these ETFs offer exposure to Nvidia stock.