Industry Updates

ETFs with high Nvidia exposure jump on earnings beat

SEMG, SMGB, XAIX and CSP1 soared on the news

Lauren Gibbons

Nvidia building

Semiconductor, artificial intelligence and S&P 500 ETFs have jumped after better-than-expected Q4 earnings from tech giant Nvidia yesterday.

Revenues for the chipmaker rose to $22.1bn in Q4 2023, $1.7bn ahead of expectations, with Q2 revenues expected to be $24bn.

Semiconductor, artificial intelligence and S&P 500 ETFs have all soared on the news.

The Amundi MSCI Semiconductors ESG Screened UCITS ETF (SEMG) saw the biggest gains, jumping 6.8% on the news. SEMG has a 26.5% Nvidia weighting.

Elsewhere, the VanEck Semiconductor UCITS ETF (SMGB) soared 5.6% in trading today, holding a 12.1% Nvidia weighting.

Artificial intelligence ETFs have also been boosted, with the Xtrackers Artificial Intelligence & Big Data UCITS ETF (XAIX) up 2.7% since the earnings were announced. XAIX has a 5.9% Nvidia weighting.

The iShares Core S&P 500 UCITS ETF (CSPX), with a 4.1% weighting, has seen shares rise 1.5%.

Nvidia, which is the third-largest listed company, has a current market valuation of $1.7trn.

The tech giant has seen its shares quadruple in value since the launch of ChatGPT in November 2022, aiding the growth of ETFs with Nvidia weightings.

The chip maker’s dominance is likely to continue into 2024.

Derren Nathan, head of equity research at Hargreaves Lansdown, said: “It’s now one of the largest companies in the S&P 500 and appears to be closing in on the $2trn threshold so the bar has been set high.

“But on an earnings basis, the valuation does not look too terrifying and CEO Jensen Huang for one sees this as just the beginning of two industry-wide transitions, the first being the move from general to accelerated computing, which in turn has enabled the birth of generative artificial intelligence.”

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