Semiconductor ETFs Whiplashed by Nvidia Revenue Miss

Nvidia outperformed analyst expectations in the earnings department, but missed on the revenue front, whiplashing semiconductor exchanged-traded funds (ETFs) in the process.

Nvidia stock fell as much as 16% in Friday’s early trading session, while semiconductor ETFs were taken down with it–ProShares Ultra Semiconductors (NYSEArca: USD)–down 5%, VanEck Vectors Semiconductor ETF (NYSEArca: SMH)–down 2.34% and iShares PHLX Semiconductor ETF (NasdaqGM: SOXX)–down 3.30%.

Leveraged ETF plays like the Direxion Daily Semiconductor Bull 3X ETF (NYSEArca: SOXL) have been riding high on the strength of the technology sector in the historic bull market run seen in U.S. equities, but it took a brunt of the semiconductor sector’s punishment on Friday–down almost 7%–with its 300% exposure. On the flip side of the coin, the Direxion Daily Semiconductor Bear 3X ETF (NYSEArca: SOXS) gained almost 6%.

Nvidia’s earnings per share came in at $1.84 per share, besting analyst expecting $1.71 per share. The culprit was revenue, which clocked in at $3.18 billion versus an expected $3.24 billion by Wall Street.

Further blame could be assigned to the chipmaker’s fourth quarter guidance as it’s expecting $2.70 billion in revenue for the final quarter while Refinitiv consensus estimates came in at a more exuberant $3.40 billion. The lower guidance came on expectations of surplus inventory for the quarter.