Play Nvidia's Surge With These ETFs
Zacks Investment Research | Sep 19, 2017 04:40AM ET
Nvidia (NASDAQ:NVDA) shares are on a tear this year, having gained about 75% (as of Sep 18, 2017). But the latest jump came on the back of “a CNBC . The analyst noted that “we are only at the cusp of AI's growth potential and NVIDIA is creating THE AI computing industry standard."
Another analyst believes that Nvidia “looks [a] lot like Intel (NASDAQ:INTC) did back in the early 1990s before a multiyear rally that took that stock up some 17-fold.”
Nvidia, which designs, develops and markets a top-to-bottom family of award-winning 3D graphics processors, graphics processing units and related software, is hugely benefiting from a cryptocurrency rally.
Bitcoin is on fire this year. These are ‘mined’ by using a greater amount of computer processing power. Creation and transactions in bitcoin are controlled through cryptography to keep transactions secure (read: Bitcoin Skyrockets, Race to First Cryptocurrency ETF Heats Up ).
Like bitcoin, Ether or etherum is also quite popular this year. Now, mining of cryptocurrencies needs the usage of semiconductors. A hardware known as an ASIC (Application-Specific Integrated Circuit) is designed explicitly for mining bitcoin.
This where semiconductor companies can gain traction. As per Should You Buy These Semiconductor ETFs & Stocks Now ).
Inside Stock Strength
The earnings projection for the upcoming quarter was upped to 94 cents per share from 78 cents in the last 60 days. Seven out of eight analysts raised estimates while none did the opposite.
Nvidia has a Zacks Rank #1 (Strong Buy) with a Growth Score of C. The Zacks Industry Rank and Zacks Sector Rank are in the top 1% and top 31%, respectively.
ETFs to Buy
Given the bullishness, investors should definitely ride the surge in a basket form. Below are five ETFs with the highest allocation to this graphics chipmaker that could make a compelling play at least in the near term (see ARKQ
This is an actively managed ETF seeking long-term capital appreciation by investing in companies that benefit from the development of new products or services, technological improvement and advancements in scientific research related to robotics, energy storage, innovative materials, alternative energy sources, infrastructure development, space exploration, autonomous vehicles and 3D printing. NVIDIA occupying the third position with 7.3% share. The product has accumulated $73.2 million in its asset base and charges 75 bps in fees per year (read: HECO
This is an actively managed ETF that offers exposure to ecologically focused companies. It holds 43 stocks in its basket with NVIDIA taking the top spot at 5.48% of assets. Expense ratio comes in at 0.95%. The fund has AUM of $8.4 million.
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