ETFs to Buy After NVIDIA's Q1 Earnings Miss, Record Revenues

NVIDIA (NVDA) reported mixed Q1 fiscal 2026 results, with EPS of $0.81 missing estimates by $0.04, ending a nine-quarter streak of beats; however, revenue surged 69% year-over-year to a record $44.1 billion, surpassing estimates driven by a 73% increase in data center revenue to $39.1 billion and a 42% increase in gaming revenue to $3.8 billion. The company projects Q2 revenue of $45 billion, plus or minus 2%, which includes an estimated $8 billion impact from H20 export restrictions, and several ETFs with significant NVIDIA holdings, including SHOC, SMH, SMHX, SOXY, and SEMI, may offer investors exposure to its growth.

Analysis

NVIDIA (NVDA) presented mixed first-quarter fiscal 2026 results, with earnings per share of 81 cents missing the Zacks Consensus Estimate by 4 cents, thereby concluding a nine-quarter streak of earnings beats. However, the company achieved record-breaking revenues of $44.1 billion, a 69% year-over-year surge that surpassed the consensus estimate of $42.70 billion, primarily fueled by its data center business. This segment's revenues jumped 73% year-over-year to $39.1 billion, driven by strong demand for NVIDIA's AI chips. The gaming division also demonstrated robust performance, with revenues increasing 42% year-over-year to $3.8 billion, partly due to the Nintendo Switch 2 launch. Furthermore, the automotive and robotics segment reported a 72% revenue increase to $567 million, supported by demand for self-driving car chips and advancements like the Isaac GR00T N1 humanoid robot foundation model. NVIDIA is expanding globally with AI factory plans in the US and Saudi Arabia and the Stargate UAE AI cluster, alongside strengthening partnerships with major cloud providers like Microsoft, Oracle, and Google for its Blackwell-based instances. For the second quarter of fiscal 2026, NVIDIA projects revenues of $45 billion, plus or minus 2%, a figure that incorporates an estimated $8 billion negative impact from H20 export restrictions, mainly affecting sales to China. Despite this headwind and the EPS miss, NVIDIA's shares rose by as much as 6% in after-hours trading, reflecting investor confidence in its continued growth driven by AI infrastructure demand.

Key Decisions for Investors

• Investors could consider leveraging NVIDIA's strong revenue growth and leadership in the AI sector by exploring investments in semiconductor-focused ETFs such as Strive U.S. Semiconductor ETF (SHOC), VanEck Vectors Semiconductor ETF (SMH), or VanEck Fabless Semiconductor ETF (SMHX), which hold significant allocations to NVIDIA and possess a Zacks ETF Rank #1 (Strong Buy).
• It is prudent to closely monitor the persistent impact of export restrictions on NVIDIA's revenues, particularly from the China market, and scrutinize upcoming earnings reports to assess if the Q1 fiscal 2026 EPS miss signals a new trend or was an isolated incident.
• Evaluate NVIDIA's long-term valuation in light of its sustained innovation and market expansion in AI, data centers, gaming, automotive, and robotics, while also considering the geopolitical risks associated with export controls and the competitive landscape of the semiconductor industry.