Nvidia's Q4 Earnings: A Catalyst for Major ETFs

Nvidia Corporation, a titan in the semiconductor industry and a driving force behind the artificial intelligence (AI) revolution, is set to release its fourth-quarter fiscal year 2025 (FY2025) earnings on Wednesday, February 26, 2025, after market close. This highly anticipated event could have significant implications for major ETFs with substantial exposure to Nvidia, such as the VanEck Semiconductor ETF (SMH), SPDR S&P 500 ETF Trust (SPY), and Invesco QQQ Trust (QQQ).

Analysts project record quarterly revenue of $38.32 billion for Q4 FY2025, reflecting a 73% year-over-year increase, surpassing Nvidia's own guidance provided in their Q3 FY2025 earnings report. Net income is expected to reach $21.08 billion, up from $12.84 billion in the same quarter of the previous year. The market sentiment remains overwhelmingly positive, with 17 out of 18 analysts issuing "buy" or equivalent ratings, and one hold. The consensus price target is approximately $175, suggesting a 26% upside from the stock price of $134.43 on February 20, 2025.



Nvidia's strong performance and high expectations have led to significant weight in several prominent ETFs:

1. VanEck Semiconductor ETF (SMH): Approximately 19% of this ETF's holdings are in Nvidia, making it highly sensitive to Nvidia's stock movements. A positive earnings report from Nvidia could boost SMH's value, while a disappointing report might lead to a decline.
2. SPDR S&P 500 ETF Trust (SPY): Nvidia comprises about 6.14% of this fund, reflecting its status as one of the largest companies in the S&P 500 Index. A strong earnings report from Nvidia could contribute to SPY's overall performance, while a weak report might negatively impact it.
3. Invesco QQQ Trust (QQQ): With an 8.1% allocation to Nvidia, this ETF is influenced by the company's performance, given its focus on major non-financial companies listed on the Nasdaq. A positive earnings report from Nvidia could drive QQQ's value higher, while a disappointing report might lead to a decline.

Investors should closely monitor these ETFs following Nvidia's earnings release to assess the potential implications for their portfolios. A strong earnings report from Nvidia could lead to an uptick in the values of these ETFs, while disappointing results might exert downward pressure on them.

In summary, Nvidia's Q4 earnings report is expected to have a significant impact on major ETFs with substantial exposure to the company, such as SMH, SPY, and QQQ. Investors should closely monitor these ETFs following Nvidia's earnings release to assess the potential implications for their portfolios. A strong earnings report from Nvidia could lead to an uptick in the values of these ETFs, while disappointing results might exert downward pressure on them.