Nvidia Helps Lift Semiconductor ETFs | ETF Trends

Nvidia (NasdaqGS: NVDA) has rallied this week, lifting semiconductor sector-related exchange traded funds, after several analysts highlighted the technology giant’s opportunities in the metaverse and gaming.

On Friday, the iShares PHLX Semiconductor ETF (NasdaqGS: SOXX) gained 1.6% and the VanEck Vectors Semiconductor ETF (SMH) rose 1.6%.

Meanwhile, Nvidia shares were up 5.8%. NVDA makes up 6.6% of SOXX’s underlying portfolio and 9.0% of SMH.

The chipmaker started off the week on a good footing after an analyst at Cowen, Matthew Ramsay, argued that the company has a huge opportunity in the metaverse, which is loosely defined as people spending time in a virtual world using an avatar, and the company could build upon its other revenue segments, including gaming and data centers, the Motley Fool reports.

Specifically, Ramsay projected that when added to its other businesses, the metaverse could help Nvidia hit $140 billion in annual sales by 2030, compared to just under $27 billion in sales for fiscal 2022. Nvidia’s sales from the metaverse is expected to reach $10 billion by 2030, and he believed that the stock’s recent pullback has created a good long-term buying opportunity.

Additionally, Nvidia was added to Wells Fargo’s “Signature Picks” list, Investing.com reports. Wells Fargo analyst Aaron Rakers highlighted potential upbeat announcements from Nvidia at its upcoming investor day, and he also argued that the recent market downturn created a favorable risk/reward profile for the current stock price.

Nvidia will host its flagship technical conference called GTC next Monday to Thursday. Citi analysts Atif Malik and Amanda Scarnati noted that the conference will bring out a wave of new products because the company tends to not provide target financial models, Barron’s reports.

The team at Citi also underscored how last year Nvidia surprised investors with the announcement of the Grace computer processing unit, along with raising the prospect of monetizing artificial intelligence. Additionally, the company provided updates on sales to the gaming industry and $8 billion in the contract pipeline from the auto industry.

Consequently, many are looking to the upcoming conference as another potential source of surprises that could provide guidance on how Nvidia will expand its businesses ahead.

For more market trends, visit ETF Trends.