NVIDIA Regains Momentum on AI Growth: ETFs to Tap

After being beaten down in December, NVIDIA NVDA regained its glory at the start of 2025. The stock surged to a new all-time high after its server partner, Foxconn, announced record Q4 revenues and a strong sales forecast, which boosted optimism for AI-fueled growth.

Several AI-centric announcements by NVIDIA at the Consumer Electronics Show (CES) in Las Vegas will further drive the stock higher. Investors seeking to capitalize on the growth story could invest in ETFs having the largest allocation to the AI chipmaker. These include Strive U.S. Semiconductor ETF SHOC, Columbia Semiconductor and Technology ETF SEMI, VanEck Vectors Semiconductor ETF SMH, YieldMax Target 12 Semiconductor Option Income ETF SOXY and VanEck Fabless Semiconductor ETF SMHX.

AI Launches at CES

At CES, NVIDIA’s chief executive officer Jensen Huang announced a raft of new chips, software and services, aiming to stay at the forefront of artificial intelligence computing.

Huang debuted the latest generation of graphics processors for desktop and laptop gaming systems, dubbed the GeForce RTX 50 Series. The series includes RTX 5090, RTX 5080, RTX 5070 Ti and RTX 5070. The flagship RTX 5090 and RTX 5080 models will be available later this month for $1,999 and $999, respectively. RTX 5070, costing $549 and RTX 5070 Ti, costing $749, will debut in February. This is the first time that NVIDIA has released a titanium edition card (read: Palantir vs. NVIDIA ETFs: Better AI Plays for 2025?). 

Huang said AI is moving from the current generative AI phase to an "agentic AI" phase where software and devices work on behalf of users. The logical progression for agentic AI is to move from software agents to autonomous machines or physical AI operating in the real world. At CES 2025, the AI chip leader launched NVIDIA Cosmos, a computing platform for accelerating physical AI development. Cosmos offers world foundation models to help developers make next-generation autonomous vehicles and robots.

Finally, NVIDIA announced a high-end personal computer called Project Digits, powered by its Nvidia GB10 Grace Blackwell Superchip and running the Linux-based Nvidia DGX operating system. The system will come preconfigured with NVIDIA’s AI software stack. The new PC is expected to start at $3,000 and will be available in May from NVIDIA and its hardware partners. It will be marketed to AI researchers, data scientists and students. With NVIDIA Project Digits, developers can run up to 200-billion-parameter large language models for AI applications.

Solid Estimates

NVIDIA saw a solid earnings estimate revision of 3 cents over the past 30 days for the fiscal year (January 2026), with an estimated earnings growth rate of 41.7%. Revenues are expected to grow 48.7% in the next fiscal year. 

The stock has a Zacks Rank #2 (Buy) and a Growth Score of A, suggesting that it is primed for growth.

Bullish Analysts

Wall Street analysts maintained their bullish view on the stock, with many raising the target price. NVIDIA currently has a Wall Street analyst recommendation of 1.25 on a scale of 1 to 5 (Strong Buy to Strong Sell), made by 44 brokerage firms. Of these, 37 are Strong Buy and three are Buy. Strong Buy and Buy, respectively, account for 84.09% and 6.82% of all recommendations. 

Based on short-term price targets offered by 42 analysts, the average price target for NVIDIA comes to $175.55. The forecasts range from a low of $135.00 to a high of $220.00.

What Does its Valuation Say?

NVIDIA is by far the biggest outperformer among the so-called “Magnificent Seven.” It is currently trading at a P/E ratio of 49.83 versus the Semiconductor - Generalindustry average of 32.68. Despite its high valuation, investor confidence remains strong due to its clear leadership in AI hardware and software solutions. The AI chipmaker’s earnings are growing faster than its share price (read: 5 Most-Bought Stocks & ETFs of 2024: AI Rules).

Further, the stock is currently trading at a PEG ratio of 2.49, much lower than the industry average of 3.86. The lower the PEG ratio, the better the value, as investors would pay less for each unit of earnings.

ETFs to Tap

Strive U.S. Semiconductor ETF (SHOC) – NVIDIA exposure: 21.1%

Columbia Semiconductor and Technology ETF (SEMI) – NVIDIA exposure: 21.0%

VanEck Vectors Semiconductor ETF (SMH) – NVIDIA exposure: 20.1%

YieldMax Target 12 Semiconductor Option Income ETF (SOXY) – NVIDIA exposure: 20.5%

VanEck Fabless Semiconductor ETF (SMHX) – NVIDIA exposure: 19.9%

Single-Stock ETFs

With the surge in NVIDIA, investors seeking to take more risk could also bet on single stock ETFs having 200% exposure to NVIDIA. These include T-REX 2X Long NVIDIA Daily Target ETF NVDX and GraniteShares 2x Long NVDA Daily ETF NVDL (read: 5 Best-Performing Single-Stock ETFs of 2024).

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