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Traders: It’s Time to Examine These Nvidia ETFs

BY | ETF Database
8:27 am ET 08/20/26 | 7 VIEWS
Traders aren’t wrong in feeling as though second-quarter earnings season is over. However, there’s at least one big report left to absorb. Nvidia (NVDA) is slated to deliver its fiscal second-quarter update on Wednesday, August 26.Earnings reports are often the ideal times for tactical traders to consider leveraged and inverse ETFs, indicating that the Direxion Daily NVDA Bull 2X Shares (NVDU A-) and the Direxion Daily NVDA Bear 1X Shares (NVDD A-) could soon have their moments in the sun. The two Direxion ETFs turn three years old next month. NVDU attempts to deliver 200% of the daily performance of the bellwether semiconductor stock while the bearish NVDD seeks returns corresponding with the daily inverse performance of Nvidia. Given Nvidia’s knack for beating estimates and raising guidance, it’s not a stretch to assume traders will be focusing on the bullish NVDU. “We’re looking for another beat-and-raise quarter, given the strong capex trends among hyperscalers and enterprises,” noted Morningstar analyst Brian Colello. “Nvidia should generate well over $300 billion of data center revenue in calendar 2026, which is effectively fiscal 2027, and perhaps over $500 billion in fiscal 2028. We expect to hear an update regarding sales (or non-sales) into China.”Both ETFs Could Be in FocusSome traders and investors have bullish biases, but that shouldn’t get in the way of acknowledging the bearish NVDD as a post-earnings play on Nvidia. In fact, the case for that inverse ETF may be heightened at a time when more market participants express concern about artificial intelligence (AI) financing plans. “Perhaps the most polarizing issue has been Nvidia’s financing and backstopping of certain partners, including its recently announced $500 billion mobilization of large financial asset managers to invest in artificial intelligence,” added Colello. “We trust that Nvidia will lay out its case for why it is arranging such partnerships and/or financing certain firms.” If Nvidia successfully allays those concerns, that could be a catalyst for the stock and the bullish NVDU, potentially providing icing on the cake for what some experts view as an undervalued stock. “With its 4-star rating, we believe Nvidia stock is moderately undervalued compared with our long-term fair value estimate of $280 per share,” concluded Colello. “Our fair value estimate and Nvidia’s stock price will be driven by its prospects in the data center and AI GPUs, for better or worse. Nvidia’s DC business has achieved exponential growth already, rising from $3 billion in fiscal 2020 to $194 billion in fiscal 2026, and we estimate it will be $361 billion in fiscal 2027, representing 86% annual growth.” For more news, information, and analysis, visit the Leveraged & Inverse Content Hub.

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