Breaking News
Investing Pro 0
💎 Access the Market Tools Trusted by Thousands of Investors Get Started

Here's How to Jump on the Nvidia and Meta Bandwagon at This Point

By Investing.com (Ismael De La Cruz)Market OverviewJun 05, 2023 22:42
au.investing.com/analysis/heres-how-to-jump-on-the-nvidia-and-meta-bandwagon-at-this-point-200568716
Here's How to Jump on the Nvidia and Meta Bandwagon at This Point
By Investing.com (Ismael De La Cruz)   |  Jun 05, 2023 22:42
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
 
META
-1.23%
Add to/Remove from a Portfolio
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
NVDA
-0.50%
Add to/Remove from a Portfolio
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
USD
-0.85%
Add to/Remove from a Portfolio
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
OEX
0.00%
Add to/Remove from a Portfolio
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
WUGI
+0.00%
Add to/Remove from a Portfolio
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
VCAR
0.00%
Add to/Remove from a Portfolio
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
  • Nvidia and Meta's stocks have skyrocketed this year
  • Investors looking to gain from Meta and Nvidia's rallies have plenty of ways to do so
  • And low-cost ETFs are one of the best options out there

S&P 500's surge can be largely attributed to the dominance of technology companies, with 70% of the top 10 companies belonging to this sector. This dominance is fueled by two key factors:

  1. The rapid expansion of artificial intelligence.
  2. The potential peaking of interest rates.

In a striking resemblance to the 1970s, the top 10 companies in the S&P 500 now command an impressive 29% of the index's weight.

Among the top-weighted companies in the S&P 500, Exxon Mobil Corp (NYSE:XOM) and UnitedHealth Group Incorporated (NYSE:UNH) have experienced declines of -2.6% and -4% respectively this year.

However, two stocks stand out with remarkable growth: Nvidia (NASDAQ:NVDA), which has skyrocketed by +169% in 2023, and Meta (NASDAQ:META), which has surged by +126.5% after facing a -64% decline last year.

Time will tell if it is too late to invest in these stocks, but there are multiple ways to do so if you want to capitalize on the AI and metaverse frenzy.

4 ETFs With High Exposure to Nvidia

Nvidia stock is feeding off the AI boom, as the company specializes in designing chips and software that power AI applications.

Moreover, Nvidia's growth projections are impressive, with market estimates of earnings of $7.76 per share for the fiscal year. This represents a remarkable increase of +132% compared to the previous fiscal year.

NVIDIA Daily Chart
NVIDIA Daily Chart

There are two options for those who wish to have exposure to Nvidia. The first one is obvious, by buying shares of the company.

The second choice is ETFs. There is a wide range of these investment vehicles with good exposure to the company. I will leave you 4 examples, along with their commission and their profitability so far in 2023:

  • ProShares Ultra Semiconductors (NYSE:USD): +122% (fee 0.95%, exposure 25%).
  • VanEck Semiconductor (NASDAQ:SMH): +42% (fee 0.35%, exposure 17%).
  • AXS Esoterica NextG Economy (NYSE:WUGI): +40.5% (commission 0.75%, exposure 17%).
  • Simplify Volt RoboCar Disruption and Tech (NYSE:VCAR): +40% (commission 0.95%, exposure 13%).

3 Ways to Take Advantage of the Metaverse Craze

Meta, formerly known as Facebook, represents the forefront of the metaverse sector, reflecting its recent name change. The stock's rally so far indicates investors' faith in the metaverse sector.

Meta Daily Chart
Meta Daily Chart

But, buying Meta stock is not the only way you can invest in the metaverse. Here are 3 ETFs you can consider instead:

  1. Roundhill Ball Metaverse ETF (NYSE:METV): This ETF, launched in 2021, tracks the Ball Metaverse Index. It comprises 40 companies, providing exposure to the metaverse sector. Around 80% of its holdings are based in the United States, with the remaining 20% in Asia.

  2. Franklin Metaverse (ETR:FLRA): This ETF follows the Solactive Global Metaverse Innovation Net Return index, which includes companies with significant involvement in the metaverse and technology. It is listed on the German, Italian, and London stock exchanges. Notably, it boasts a low expense ratio of only 0.3%, which is half the industry average for this sector.

  3. Fidelity® Metaverse ETF (NASDAQ:FMET): This ETF focuses on companies involved in the development, manufacturing, distribution, and sale of products or services related to the metaverse. It offers a reasonable fee of 0.5% for investors.

How Will U.S. Stocks Fare This June?

The S&P 500 rose +0.25% in May. The index has risen in 10 out of the past 11 Mays, but gains have been minimal in the past two years, with only a +0.01% increase in May 2022 and +0.25% this year.

Nvidia powered a 9% rally in the technology sector, while the communication and consumer sectors also showed strong performance. However, other sectors experienced declines.

As we enter June, historical data reveals an average rise of +0.03% over the past 72 years, positioning it as the 4th weakest month in terms of profitability, consistent with the trend observed in the last 10 years.

When examining the past 20 years, June ranks as the 3rd worst month, trailing only January and September.

Nevertheless, there is some consolation in the fact that during pre-election years, June has recorded an average increase of +1.5%, outperforming most other months.

S&P 100 Daily Chart
S&P 100 Daily Chart

While the S&P 100 reached a new 52-week high last week, the Russell 2000 remains 12% below its 52-week high.

But, there's another development. There is a historic divergence forming between Nasdaq 100 and Dow Jones Industrial Average.

The Nasdaq 100 continues to outperform the Dow Jones by a considerable margin this year. In May alone, the Nasdaq surged by +5.8%, whereas the Dow Jones declined by -3.5%.

This represents a substantial gap of 9.29 percentage points, ranking as the 9th largest disparity in history between these two indexes.

The following chart visually depicts the comparison between the Nasdaq 100 and Dow Jones indexes, illustrating their contrasting trajectories.

Nasdaq 100 Vs. DJIA
Nasdaq 100 Vs. DJIA

It is worth noting that the previous eight instances occurred within a span of 35 months, specifically from December 1998 to October 2001.

In contrast, the three sectors that performed the worst in 2022, namely communications, consumer, and technology, have emerged as the top performers in 2023. Conversely, the energy sector, which was the leading sector in 2022, has experienced a decline of -9% this year.

Investor sentiment (AAII)

Bullish sentiment, i.e., expectations that stock prices will rise over the next six months, increased by 1.7 percentage points to 29.1%. However, bullish sentiment remains below its historical average of 37.5%.

Bearish sentiment, i.e., expectations that stock prices will fall over the next six months, decreased 2.9 percentage points to 36.8%. Bearish sentiment remains above its historical average of 31%.

Here's how the major U.S. and European stock markets are doing so far in 2023:

InvestingPro tools assist savvy investors in analyzing stocks. By combining Wall Street analyst insights with comprehensive valuation models, investors can make informed decisions while maximizing their returns.

Start your InvestingPro free 7-day trial now!

Disclaimer: This article was written for informational purposes only; it does not constitute a solicitation, offer, advice, counsel, or recommendation to invest, nor is it intended to encourage the purchase of assets in any way.

Here's How to Jump on the Nvidia and Meta Bandwagon at This Point
 

Related Articles

David Bassanese
Hawkish pause By David Bassanese - Sep 25, 2023

Global markets The ‘no-landing’ correction in global equities continued last week, with the S&P 500 down a chunky 2.9% and US 10-year bond yields rising another lazy 0.10% to...

Here's How to Jump on the Nvidia and Meta Bandwagon at This Point

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email