Will Nvidia's Q2 Earnings Blowout Trigger a Tech ETF Surge?
Analysts predict that Nvidia’s revenue and profit will more than double compared to the same period last year.
This week’s most anticipated financial event is Nvidia’s (NVDA) earnings report, scheduled for release after the bell on August 28, Wednesday. The performance for this quarter could act as a major catalyst for AI trading and the broader U.S. stock market.
With extremely high market expectations, Nvidia (NVDA) needs to surpass challenging benchmarks to meet investor demands. The company’s stock has surged nearly 160% this year.
Bloomberg reports that analysts expect Nvidia’s earnings per share to be $0.64, with revenue reaching $28.8 billion, marking year-over-year increases of 133% and 109%, respectively. Earlier this year, following its Q1 report, Nvidia initiated a 10-for-1 stock split.
Key Focus Areas for Nvidia’s Earnings Report
Investors should pay close attention to Nvidia's Q2 revenue figures and future guidance. Last quarter, Nvidia forecasted Q2 revenue to be $28 billion. Given that the company has exceeded expectations in the past four quarters, a repeat performance is anticipated.
Moreover, investors will be keen on Nvidia's guidance for Q3 and updates on the production of the next-generation Blackwell chips. Recent media reports suggest that Blackwell chips may face a three-month delay, raising questions about their accuracy and implications for Nvidia’s growth in 2025.
Impact of Nvidia’s Stock on ETFs
SPDR S&P 500 ETF Trust (SPY)
Nvidia’s weight in SPY is close to 7%, making it a major holding alongside Apple (AAPL) and Microsoft (MSFT) in this leading ETF. As SPY covers a broad range of market sectors, Nvidia’s stock price fluctuations will significantly affect SPY’s performance, especially given current sensitivity to tech stocks.
Invesco QQQ Trust Series I (QQQ)
Nvidia holds an 8% weight in QQQ, on par with Microsoft and just behind Apple’s 9%. Since QQQ tracks the Nasdaq-100 Index, which includes many tech stocks, Nvidia’s earnings report will directly impact QQQ. Strong results could further boost QQQ’s performance.
iShares Semiconductor ETF (SOXX)
With a 9% weight, Nvidia is a key component of SOXX. As a major player in the semiconductor industry, Nvidia’s earnings are crucial for SOXX. Better-than-expected results could drive SOXX higher, while disappointing results might cause a decline.
VanEck Semiconductor ETF (SMH)
Nvidia’s weight in SMH is a substantial 22%, the highest among semiconductor ETFs. This means Nvidia’s earnings report will have a particularly significant impact on SMH. Strong earnings could positively influence SMH, whereas weaker results might lead to a drop.
Impact on Single-Stock ETFs
GraniteShares 2x Long NVDA Daily ETF (NVDL)
GraniteShares 2x Long NVDA Daily ETF (NVDL) is a leveraged ETF designed to provide twice the daily return of Nvidia’s stock. It is ideal for investors seeking to capitalize on amplified short-term movements in Nvidia’s stock, but it comes with high risk due to leverage and volatility.
T-Rex 2X Long NVIDIA Daily Target ETF (NVDX)
Global X NVIDIA ETF (NVDX) focuses exclusively on Nvidia stock, making it highly sensitive to Nvidia’s earnings report. The results will directly affect NVDX’s performance. Positive earnings could lead to a swift increase, while disappointing results may cause significant volatility.
As the earnings report approaches, Nvidia’s performance is expected to significantly impact these ETFs. Investors should closely monitor Nvidia’s earnings and outlook to make informed decisions in response to market fluctuations.
$SPDR S&P 500 ETF Trust(SPY)$ $Invesco QQQ(QQQ)$ $iShares Semiconductor ETF(SOXX)$ $VanEck Semiconductor ETF(SMH)$ $GraniteShares 2x Long NVDA Daily ETF(NVDL)$ $T-REX 2X LONG NVIDIA DAILY TARGET ETF(NVDX)$
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