Semiconductor ETFs Rally Despite Nvidia Dip: 10 Chipmakers Defy The AI Darling's Drop

Thursday’s trading session unfolded with semiconductor stocks surging despite a drop in Nvidia Corp.’s NVDA shares.

Nvidia's earnings were seen as a critical juncture for the broader stock market in August, with the potential to either boost or reverse the recent rally. However, events did not play out as many had expected.

Nvidia Shares Fall On Unimpressive Guidance

Nvidia’s shares failed to rebound after a negative reaction in Wednesday’s post-market hours.

The Santa Clara, California-based company reported quarterly revenue of $30 billion, beating estimates of $28.86 billion, reflecting a 15% increase from the previous quarter and an impressive 122% year-over-year growth.

Net income reached $16.6 billion, up 12% from the prior quarter and a significant 168% increase compared to the same quarter last year. Earnings per share came in at 68 cents, surpassing the expected 64 cents.

Despite surpassing Wall Street’s revenue and earnings forecasts, Nvidia’s outlook failed to meet investors' already lofty expectations for the coming quarters. The company projected this quarter's revenue at $32.5 billion, plus or minus 2%, slightly above the estimated $31.9 billion, but not enough to excite the market.

See Also: NVIDIA To Rally Over 31%? Here Are 10 Top Analyst Forecasts For Thursday

7 Semiconductor ETFs Rise

Investors likely viewed Nvidia's quarterly results as a standalone event, opting for caution as the company's guidance did not significantly exceed expectations.

Yet, they maintained a generally positive sentiment toward the broader market. Competitors of the AI giant experienced a marked rally, deviating from their usual trend of closely following Nvidia’s performance.

“We believe Nvidia's comments on Data Center demand were constructive,” Toshiya Hari, an analyst at Goldman Sachs, stated. The company’s outlook for data center demand bodes well for other semiconductor firms involved in the AI infrastructure build-out.

Hari highlighted “ongoing tightness in High-Bandwidth Memory as a material positive for Buy-rated Micron Technology Inc. MU.”

Even exchange-traded funds (ETFs) with a significant Nvidia exposure witnessed positive performance during Thursday's trading session. Here are some notable movers:

• Strive U.S. Semiconductor ETF SHOC: up 0.7%, despite Nvidia comprising 30% of the fund.
• VanEck Semiconductor ETF SMH: up 0.8%.
• VanEck Fabless Semiconductor ETF SMHX: up 1.2%. This newly launched ETF focuses on companies that specialize in chip design and development while outsourcing production.
• Invesco PHLX Semiconductor ETF SOXQ: up 1.4%.
• First Trust Nasdaq Semiconductor ETF FTXL: up 1.6%.
• iShares Semiconductor ETF SOXX: up 1.7%.
• SPDR S&P Semiconductor ETF XSD: up 2.7%.

Thursday’s Top-Performing Semiconductor Stocks

Name	1-Day %
Arm Holdings pic ARM	4.81%
Intel Corporation INTC	4.50%
Marvell Technology, Inc. MRVL	4.29%
ON Semiconductor Corporation ON	4.18%
Qorvo, Inc. QRVO	3.73%
Teradyne, Inc. TER	3.37%
Onto Innovation Inc. ONTO	3.06%
Microchip Technology Incorporated MCHP	2.98%
Analog Devices, Inc. ADI	2.82%
Skyworks Solutions, Inc. SWKS	2.80%

Now Read:

• Nvidia Analysts Say Pullback Is Buying Opportunity: ‘Pushing AI Envelope Too Significant To Slow Down’