Nvidia’s Earnings: Biggest News of the Week for ETFs
The most highly anticipated event of the week in financial markets is, without a doubt, the release of Nvidia’s earnings report after the bell on Wednesday, Aug. 28.
The AI powerhouse is expected to announce another blowout quarter thanks to insatiable demand for the company’s AI chips.
But expectations are sky high, which means that Nvidia has a high bar to climb in order to satisfy demanding investors, who have pushed the company’s stock up by almost 160% this year.
Nvidia Earnings: What to Watch
The most important number to watch is Nvidia’s revenue for Q2—as well as its forward guidance.
Three months ago, Nvidia forecast revenues of $28 billion for the second quarter. But the company has beaten its guidance by $2 billion or more in each of the past four quarters—something that many investors expect to happen again.
That means that anything less than $30 billion of revenue for Q2 could be seen as a disappointment by investors. While anything higher than that could satisfy the bulls.
In addition to the Q2 numbers, investors will look to see where Nvidia sets its guidance for Q3, as well as commentary on the ramp up in production of the company’s next generation Blackwell chips.
Earlier this month, media reports suggested that Blackwell chips could be delayed by up to three months. Investors will be keen to hear whether those reports were accurate and if so, what it means for Nvidia’s growth in 2025.
Nvidia Stock's Impact on ETFs
Movements in Nvidia’s stock price could have a significant impact on all sorts of exchange-traded funds this week. The stock has a nearly 7% weighting in the SPDR S&P 500 ETF Trust (SPY), which puts it neck-and-neck with Apple and Microsoft as the biggest holding of the world’s largest ETF.
It also has an 8% weighting in the Invesco QQQ Trust (QQQ), equal to Microsoft, and just behind Apple’s 9% weighting.
Semiconductor ETFs, like the iShares Semiconductor ETF (SOXX) and the VanEck Semiconductor ETF (SMH) also have large allocations to the stock: 9% and 22%, respectively.