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By Meg Flippin, Benzinga
When it comes to artificial intelligence and machine learning, chip maker Nvidia (NASDAQ: NVDA) has become synonymous with this game-changing and transformative technology. However, it wasn’t always that way. Years ago, Nvidia was known solely for making graphic chips. Recognizing early on the impact AI will have, it shifted focus and never looked back.
Since then, Santa Clara, California-based Nvidia has been trailblazing in the AI market, churning out graphic chips that power many of these advanced models. Virtually every technology company, including Amazon.com (NASDAQ: AMZN), Alphabet (NASDAQ: GOOG), Microsoft (NASDAQ: MSFT) and Meta Platforms (NASDAQ: META) use Nvidia chips. At last check, Nvidia was sporting a market capitalization of over $3 trillion. Year-to-date shares are up more than 160%. Over the past five years, it has gained over 3,000%.
Earnings On The Horizon
Among factors impacting the stock over the past few days is anticipation ahead of the company’s fiscal second-quarter earnings, which Nvidia is slated to report after the close of trading on August 28. Wall Street expects Nvidia to weigh in with EPS of $0.59 per share, which is much higher than the $0.25 Nvidia reported in the year-ago fiscal second quarter. If Nvidia is able to beat that number or post a rosier-than-expected outlook for the remainder of this year and beyond, it could drive the stock higher. Bulls argue Nvidia’s line up of AI chips and processors, which it rolls out on a staggered basis, will be enough to maintain its leading market share position next year and beyond.
Bears, however, point to reported delays in its next line of AI chips – dubbed Blackwell processors – as a sign something is amiss. These chips are supposed to be faster and cheaper, but reports have emerged that they are delayed because of design flaws. Investors and analysts will be paying close attention to what Nvidia has to say on that front when it reports earnings.
“While the reported delay in Nvidia's Blackwell (i.e., next-generation GPU architecture) could lead to some near-term volatility in fundamentals, we expect management commentary, coupled with supply-chain data points over the coming weeks, to lead to higher conviction regarding Nvidia's earnings power in 2025,” Goldman Sachs wrote in a recent research report. "Importantly, we believe customer demand across large cloud service providers and enterprises is strong, and Nvidia’s robust competitive position in AI/accelerated computing remains intact.”
Experiencing Both Worlds With REX Shares ETFs
If Nvidia disappoints or offers up a murky outlook, shares could be under pressure. If it beats expectations and signals all is well on the Blackwell front, shares may soar. Whichever way traders believe the much-talked-about stock will go, REX Shares Nvidia-focused ETFs offer the opportunity for traders to potentially profit off their expectations. These leveraged ETFs are funds that use debt or derivatives to increase the returns on the stock. They can potentially generate quicker and larger returns than the tracked asset and provide a way for investors to hedge against a stock going up or down, while at the same time carrying more risk as leveraged instruments.
To learn more about leveraged ETFs and what REX Shares has to offer, click here.
REX Shares’ T-REX 2X Long NVIDIA Daily Target ETF’s (BATS: NVDX) objective is to magnify the daily performance of the publicly traded common stock of Nvidia toward the upside. The fund seeks daily investment results, before fees and expenses, of 200% of the daily performance of NVDA. The fund does not seek to achieve its stated investment objective for a period of time different from a trading day. Year-to-date, the fund is up more than 350% as of Aug 20.
The performance data quoted represents past performance. Past performance does not guarantee future results. The investment return and principal value of an investment will fluctuate so that an investor’s shares, when sold or redeemed, may be worth more or less than their original cost and current performance may be lower or higher than the performance quoted. Performance current to the most recent month-end can be obtained by calling 844-802-4004. Short term performance, in particular, is not a good indication of the fund’s future performance, and an investment should not be made based solely on returns.
The T-REX 2X Inverse NVIDIA Daily Target ETF (BATS: NVDQ), on the other hand, seeks daily investment results, before fees and expenses, of 200% of the inverse (or opposite) of the daily performance of NVDA. With these two ETFs bears and bulls can get in on the Nvidia journey upward – or downward.
For those who would rather play it straighter, REX Shares also offers the REX FANG & Innovation Equity Premium Income ETF (BATS: FEPI), which combines big tech stock exposure and potential for income in a covered call ETF. Among the top holdings of the fund are Nvidia, Amazon, Apple (NASDAQ: AAPL) and Salesforce.com Inc. (NYSE: CRM).
When it comes to investing in Nvidia, it may not be for the faint-hearted. The stock has been soaring, but there are also times of volatility. Investors looking to short or long Nvidia can do so with REX Shares ETFs.
NVDX and NVDQ do not seek to achieve their stated investment objectives for a period of time different than a trading day.
Investing in the Funds is not equivalent to investing directly in NVDA.
The Funds are not intended to be used by, and are not appropriate for, investors who do not intend to actively monitor and manage their portfolios.
Check out 2x leveraged NVDA ETFs here!
Featured photo by Igor Omilaev on Unsplash.
Benzinga is a leading financial media and data provider, known for delivering accurate, timely, and actionable financial information to empower investors and traders.
This post contains sponsored content. This content is for informational purposes only and is not intended to be investing advice.
FOR NVDX STANDARDIZED FUND RETURNS: https://www.rexshares.com/nvdx/
An investor should carefully consider a Fundâs investment objective, risks, charges, and expenses before investing. A Fundâs prospectus and summary prospectus contain this and other information about the REX Shares. To obtain a Fundâs prospectus and summary prospectus call 844-802-4004. A Fundâs prospectus and summary prospectus should be read carefully before investing.
Investing in a REX Shares ETF may be more volatile than investing in broadly diversified funds. The use of leverage by a Fund increases the risk to the Fund. The REX Shares ETFs are not suitable for all investors and should be utilized only by sophisticated investors who understand leverage risk, consequences of seeking daily leveraged, or daily inverse leveraged, investment results and intend to actively monitor and manage their investment.
NVIDIA Corporation Investing Risk â NVIDIA Corporation faces risks associated with meeting the evolving needs of its large markets â gaming, data center, professional visualization and automotive â and identifying new products, services and technologies; competition in its current and target markets; changes in customer demand.
Important Information Regarding 2X NVDA Fund. The T-REX 2x Long NVIDIA Daily Target ETF (NVDX) seeks 2X% daily leveraged investment results and thus will have an increase of volatility relative to the NVDA performance itself. Longer holding periods, higher volatility of NVDA and leverage increase the impact of compounding on an investorâs returns. During periods of higher volatility, the volatility of NVDA may affect the fundâs performance.
Important Information Regarding -2X NVDA Fund. The T-REX 2X Inverse NVDA Daily Target ETF (NVDQ) seeks daily inverse investment results and is very different from most other exchange-traded funds. Longer holding periods and higher volatility of NVDA increase the impact of compounding on an investorâs returns. During periods of higher volatility, the volatility of NVDA may affect the fundâs return as much as, or more than, the return of NVDA.
Derivatives Risk. Derivatives are financial instruments that derive value from the underlying reference asset or assets, such as stocks, bonds, or funds (including ETFs), interest rates or indexes.
Distributor: Foreside Fund Services, LLC, member FINRA, not affiliated with REX Shares or the Fundsâ investment advisor.
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