NVIDIA NVDA reported robust third-quarter fiscal 2025 results, topping earnings and revenue estimates. Revenues doubled year over year amid relentless demand for its artificial intelligence chips. The AI darling offered a bullish revenue outlook for the current quarter but failed to live up to investors’ lofty expectations. As such, NVIDIA shares tumbled as much as 3% in the after-market hours.
Investors could tap the dip in the stock, with ETFs having the largest allocation to the AI chipmaker, given its growth potential. Continued AI boom and Blackwell is expected to usher growth in the coming months. Strive U.S. Semiconductor ETF SHOC, VanEck Vectors Semiconductor ETF SMH, VanEck Fabless Semiconductor ETF SMHX, Grizzle Growth ETF DARP and Columbia Semiconductor and Technology ETF SEMI could be compelling options.
NVIDIA’s Q3 Earnings in Focus
The company’s earnings per share were 81 cents for the quarter, easily surpassing the Zacks Consensus Estimate of 75 cents and skyrocketing 103% from the year-ago quarter. This represents the eighth straight quarter of earnings beat. Revenues surged 94% year over year to a record $35.1 billion and beat the consensus mark of $33.21 billion.
The blockbuster results were driven by incredible demand for NVIDIA's latest AI chips, attributing it to the widespread adoption of AI across various industries. Data Center revenues jumped 112% year over year to $30.8 billion, buoyed by strong and accelerating demand for generative AI training, and inference on the Hopper platform (read: ETFs to Buy on NVIDIA's Historic Journey to $3.6 Trillion).
“The age of AI is in full steam, driving a global transition to NVIDIA computing,” CEO Jensen Huang said. He added, “Demand for Hopper and anticipation for Blackwell—in full production—are incredible." However, production and engineering costs of the chips might weigh on the profit margins.
The company’s chief financial officer, Colette Kress, revealed that Blackwell production will begin in the fourth quarter of fiscal 2025 and ramp up into fiscal 2026. “Demand for Blackwell is expected to exceed supply for several quarters,” Kress said. Management expects NVIDIA’s gross profit margin to rebound as its Blackwell chip family ramps into bigger volumes.
For the fourth quarter of fiscal 2025, the graphics chipmaker expects revenues of $37.5 billion, plus or minus 2%. This is higher than the Zacks Consensus Estimate of $36.84 billion.
ETFs to Tap
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 27.3%.
Strive U.S. Semiconductor ETF has an AUM of $80.1 million and charges 40 bps in annual fees. It trades in a volume of 25,000 shares per day on average and sports a Zacks ETF Rank #1 (Strong 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 24%.
VanEck Vectors Semiconductor ETF has managed assets worth $24.1 billion, and charges 35 bps in annual fees and expenses. It trades in an average daily volume of 6 million shares and flaunts a Zacks ETF Rank #1.
VanEck Fabless Semiconductor ETF (SMHX)
VanEck Fabless Semiconductor ETF offers exposure to the companies involved in semiconductor production and is classified as a fabless. It follows the MarketVector US Listed Fabless Semiconductor Index and holds 23 stocks in its basket. NVIDIA takes the top spot at 22.5% share.
VanEck Fabless Semiconductor ETF debuted in the space in late August, having accumulated $14.9 million in its asset base. It charges 35 bps in annual fees and trades in a volume of 29,000 shares.
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 aims 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 35 stocks in its basket, with NVIDIA occupying the top position at 21.6% of assets.
Grizzle Growth ETF has accumulated $15 million in its asset base and charges 75 bps in annual fees (read: Pain or Gain Ahead of NVIDIA ETFs?).
Columbia Semiconductor and Technology ETF (SEMI)
Columbia Semiconductor and Technology ETF is an actively managed ETF that focuses on semiconductor and semiconductor-related businesses that may be poised to benefit from technology innovation and disruption. It holds 28 stocks in its basket, with NVIDIA occupying the top position at 20%.
Columbia Semiconductor and Technology ETF has amassed $38.7 million in its asset base and trades in an average daily volume of 3,000 shares. It charges 75 bps in fees per year.
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