To The Moon

Nvidia is moving closer to becoming the seventh company in the US stock market with a market cap exceeding $1 trillion.

Perhaps no stock this year has attracted more attention than the semiconductor giant $NVIDIA Corp(NVDA)$ . After a challenging 2022, Nvidia, considered by many as a leader in AI technology, has seen its year-to-date gains exceed 109%.

After Nvidia announced impressive financial results, Nvidia surged more than 28%, reaching historic highs above $390 per share, increasing its market cap by about $200 billion to $960 billion, moving closer to becoming the seventh company in the US stock market with a market capitalization exceeding $1 trillion.

Boosted by Nvidia's performance, other AI-related company stocks also soared, with $Advanced Micro Devices(AMD)$ surging 10% and $Taiwan Semiconductor Manufacturing(TSM)$ rising 8%.

As the sixth-largest company by market cap globally, Nvidia is held by multiple ETFs, especially those focused on AI, technology, and semiconductors, and these ETFs have performed well.

This article will focus on five ETFs that have significant holdings in Nvidia, which could be reliable choices for investors looking to invest in Nvidia through ETFs.

One advantage of investing through ETFs is that investors can also gain exposure to Nvidia's peers and competitors, which provide similar themes such as the rise of AI and the long-term growth in semiconductor demand.

Here are five ETFs that invest in Nvidia:

1. $iShares Semiconductor ETF(SOXX)$

One simple and effective way to invest in Nvidia is through iShares' SOXX ETF. This fund includes the 30 largest chipmakers in the US and manages $7.34 billion in assets.

source: ETF.com

Benefit: besides exposure to Nvidia, investors also gain significant exposure to Nvidia's competitor, AMD.

Expense ratio: 0.35%

This ETF has shown strong performance in recent years, outperforming the S&P 500 and NASDAQ 100 with an annualized return rate of 30.7% over the past three years (as of the end of the first quarter).

SOXX has a weighted average price-to-earnings ratio of 20.1, indicating its trading price is slightly lower than the market (which has a P/E ratio of about 24 times).

With its low expense ratio, reasonable valuation, strong performance track record, and significant holdings in Nvidia, SOXX appears to be an ideal choice for ETF investors looking to invest in Nvidia.

2. $VanEck Vectors Semiconductor ETF(SMH)$

In the world of major semiconductor ETFs, VanEck's $7.5 billion SMH ETF also holds the largest position in Nvidia.

In fact, its exposure to Nvidia is even higher than that of SOXX, with a weight of 15.1%.

source: ETF.com

Similar to SOXX, SMH provides investors with ample opportunities to gain exposure to AMD as well as other semiconductor manufacturers such as $Taiwan Semiconductor Manufacturing(TSM)$ and equipment manufacturer $Lam Research(LRCX)$.

Expense ratio: same as SOXX at 0.35%

SMH has a slightly higher weighted average P/E of 22.8.

Although its three-year return rate of 23.7% lags behind the impressive 30.9% return rate of SOXX during the same period, it is still an excellent return rate.

SMH appears to be another excellent choice for investors seeking NVIDIA investments.

3. $Global X Robotics & Artificial Intelligence Thematic ETF(BOTZ)$

BOTZ is an AI-focused ETF by Global X, with $NVIDIA Corp(NVDA)$ as its second-largest holding at a weight of 9.4%. NVIDIA is only surpassed by $Intuitive Surgical(ISRG)$ , which has a weight of 10.05%.

Source: ETF.com

In addition to NVIDIA and Intuitive Surgical, BOTZ holds several international stocks related to AI, robotics, and automation that may be unfamiliar to most investors.

Expense ratio of 0.69%, nearly twice that of SOXX.

BOTZ has seen a year-to-date increase of 25.2%. However, its three-year annualized return rate of 6.6% and five-year annualized return rate of 2.0% lag behind SOXX, SMH, and the broader market.

Lastly, BOTZ's weighted average P/E ratio is higher than SOXX or SMH at 38.7 times.

While BOTZ has performed well this year and offers exposure to many lesser-known AI names, the combination of these factors suggests that $iShares Semiconductor ETF(SOXX)$ and $VanEck Vectors Semiconductor ETF(SMH)$ may be better choices for NVIDIA-related ETFs.

4. $YIELDMAX NVDA OPTION INCOME STRATEGY ETF(NVDY)$

NVDY seeks to provide current income and capped gains on the Nvidia stock (NVDA) through a synthetic covered call strategy, collateralized by cash and US Treasurys. The actively managed fund uses both standardized exchange-traded and FLEX options.

Expense ratio: 0.99%

AUM: 2.65 mln

It’s a new ETF which begins to trade on 11 May this year, just two weeks ago.

5. $Technology Select Sector SPDR Fund(XLK)$

This technology-focused ETF manages $43.6 billion in assets under management (AUM), and while it has a broader scope than SOXX or BOTZ, it still places significant emphasis on NVIDIA.

NVIDIA is the third-largest holding in XLK with a weight of 4.7%.

Source: ETF.com

Expense ratio: 0.10%.

One thing to note is that while NVIDIA ranks third in XLK, it pales in comparison to larger-weighted companies like Microsoft and Apple.

It also boasts a robust performance record, providing investors with an annualized total return rate of 19.2% over the past three years, 19.5% over the past five years, and 18.9% over the past ten years.

While NVIDIA's weight in XLK is not the highest among the listed options, it may serve as a good gateway to exposure to the entire technology industry.

Conclusion

For investors interested in investing in $NVIDIA Corp(NVDA)$ -related ETFs, the five mentioned options provide different avenues. My top choice would be $iShares Semiconductor ETF(SOXX)$ or $VanEck Vectors Semiconductor ETF(SMH)$ because of their high exposure to NVIDIA, the performance records, moderate expenses, valuation, and investments in other semiconductor companies.

While SOXX appears to be the preferred choice, $Technology Select Sector SPDR Fund(XLK)$ is also appealing as it provides exposure to a wide range of technology and AI leaders beyond NVIDIA, has low expenses, and a proven long-term performance record.

$Global X Robotics & Artificial Intelligence Thematic ETF(BOTZ)$ is not a bad ETF, and it holds many interesting AI-related names. However, given its higher expenses and less impressive long-term record compared to the other options, it would be my last choice among the five ETFs.