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Leveraged ETFs for Extra Returns During NVIDIA Earnings Season
In the swiftly advancing age of technology, the semiconductor sector has emerged as a fundamental driver of economic expansion. This is particularly evident in the flourishing data centers of Johor State, which have attracted considerable international investment. Among the companies benefiting from this growth is $YTLPOWR (6742.MY)$ , a Malaysian firm that has a strategic alliance with $NVIDIA (NVDA.US)$ . After releasing a financial report, YTLPOWR's stock price surged by 12% on Thursday, with a remarkable daily turnover of 279.58 million.
NVIDIA, a global titan in graphics processing units and artificial intelligence, is set to release its financial report on August 28th (ET). This eagerly anticipated event is expected to draw the attention of investors worldwide. In light of this, we will explore how to identify and seize investment opportunities during this critical time.
Historically, the semiconductor industry has experienced two significant bull markets since 2020. The first was driven by the surge in remote work and online education demands during the COVID-19 pandemic, and the second was by the rapid advancement of artificial intelligence technologies. The Philadelphia Semiconductor Index (SOX) has seen an increase of over 200% from 2020 to 2024, highlighting the industry's robust growth momentum. Artificial intelligence is poised to become the next industrial revolution capable of significantly boosting productivity. NVIDIA's financial report release serves as a bellwether for the semiconductor sector, the U.S. stock market, and the global investment market. Wall Street analysts predict substantial growth in NVIDIA's Q2 revenue and net profit, benefitting from the strong market demand for AI chips.
Before NVIDIA's financial reports are released, investors have several strategies at their disposal. In addition to investing in NVIDIA's common stock, related ETFs have garnered significant investor interest. Moving forward, we will delve into the critical factors to consider when trading these popular ETFs and explore strategies for selecting the optimal timing for transactions.
From the beginning of 2024 to June 4th, NVIDIA's stock price $NVIDIA (NVDA.US)$ has skyrocketed by 135.13%. The largest single-stock ETF tracking NVIDIA, the $GraniteShares 2x Long NVDA Daily ETF (NVDL.US)$, has surged by an astonishing 326.29%. NVDL is designed to deliver twice the daily performance of NVIDIA's stock, meaning it aims to provide a leveraged investment option that doubles the daily return of NVIDIA's stock price movement.
Conversely, the $GraniteShares 2x Short NVDA Daily ETF (NVD.US)$ offers a 2x leveraged inverse position, rising when NVIDIA's stock declines. These leveraged and inverse ETFs provide investors with opportunities to amplify both potential gains and losses, or to even short a stock without the direct use of margin.
For more information about leveraged and inverse ETFs: NVDA or NVDL? Choosing Between Stocks and 2x Leveraged Single-Stock ETFs
For those interested in leveraging the entire semiconductor sector, several sector-specific leveraged ETFs are available. For example, the $Direxion Daily Semiconductor Bull 3x Shares ETF (SOXL.US)$ and the $Direxion Daily Semiconductor Bear 3x Shares ETF (SOXS.US)$ track the ICE Semiconductor Index with 3x leverage, attracting substantial assets and high trading volumes. However, the high volatility of these ETFs, with daily price swings exceeding 20% during significant fluctuations, presents both opportunities and risks. Due to the nature of leveraged ETFs, long-term holding can lead to significant erosion of returns, making them best suited for short-term market fluctuations, such as the lead-up to NVIDIA's earnings release.
For more information about Semiconductor ETFs: How to choose among the top 10 semiconductor ETFs amid the AI wave?
It is crucial to recognize that the leveraged ETFs discussed are characterized by high volatility, making them suitable only for short-term trading within an investment portfolio and not advisable for long-term holding. For those with a long-term view of semiconductor ETFs or Nvidia, it is recommended to choose unleveraged products. The utilization of leveraged ETFs entails greater risks, as highlighted by Will Rhind, CEO of GraniteShares, who notes that despite offering institutionally priced leverage, these products are not devoid of risk.
Disclaimer: Moomoo Technologies Inc. is providing this content for information and educational use only.
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Dragon Fish : Nvidia is not related to YTLP.![[undefined]](https://static.moomoo.com/nnq/emoji/static/image/default/default-black.png?imageMogr2/thumbnail/36x36 "undefined")
MYJaeger Dragon Fish : nvidia ai supercomputer in Johor is deployed and managed by ytlpower, I guess