Nvidia (NVDA) is a high-growth company benefiting from the surge in artificial intelligence (AI) demand. The company’s GPUs help power AI applications, from machine learning to data science. Its focus on expanding into robotics and self-driving vehicles further bolsters its growth potential. To invest in NVDA, investors may consider these two ETFs: VanEck Semiconductor ETF (SMH) and Strive U.S. Semiconductor ETF (SHOC).
Stay Ahead of the Market:
Let’s take a deeper look at these two ETFs.
VanEck Semiconductor ETF
The SMH ETF tracks the performance of the MVIS US Listed Semiconductor 25 Index. This index focuses on companies involved in semiconductor production and equipment. It provides exposure to both U.S. and internationally listed semiconductor companies. Importantly, Nvidia stock makes up 20.93% of the holdings in the SMH ETF.
Some of the top holdings in SMH ETF include Taiwan Semiconductor (TSM), Broadcom (AVGO), and Advanced Micro Devices (AMD). Further, the ETF has $18.56 million in assets under management (AUM) and has an expense ratio of 0.35%. It is worth noting that the ETF has declined 21.4% in the past three months.
Overall, the SMH ETF has a Strong Buy consensus rating. Of the 26 stocks held, 22 have Buys, and four have a Hold rating. At $307.11, the average SMH ETF price target implies a 58.02% upside potential.
Strive U.S. Semiconductor ETF
The SHOC ETF is a passively managed ETF that provides exposure to the U.S.-listed semiconductor sector. Investors should note that this ETF tracks the Bloomberg U.S. Listed Semiconductors Select Total Return Index. NVDA stock constitutes 22.79% of the holdings in the ETF.
Some of the other holdings in SHOC ETF include ASML Holding (ASML), Applied Materials (AMAT), and Intel (INTC). Also, the ETF has $67 million in AUM and has an expense ratio of 0.4%. The ETF has declined 21.6% in the past three months.
On TipRanks, SHOC has a Strong Buy consensus rating based on 29 Buys and three Holds assigned in the last three months. At $55.21, the average SHOC ETF price target implies 50% upside potential.
Concluding Thoughts
ETFs provide a diversified way to invest in Nvidia, reducing risk compared to investing directly in the stock. Furthermore, ETFs are a low-cost, liquid, and transparent way to participate in the market. Investors seeking ETF recommendations might consider SMH and SHOC, as these ETFs offer significant exposure to NVDA stock.