Should You Buy Nvidia ETFs as the Stock Slips From Record Valuation?

Tech powerhouse Nvidia (NVDA) recently made history when its market valuation reached a staggering $4.5 trillion on Sept. 30, 2025, making it the first company to hit this milestone. The following day, its stock price touched a new 52-week high of $188.14. However, this peak was short-lived as by the end of the day, the stock slipped from this high, closing at $187.24.The primary trigger behind this slip appears to be one of Nvidia's own largest customers Meta Platforms’ (META) announcement of its acquisition of chip startup Rivos to accelerate the development of its in-house chips signaling a strategy, adopted by other major tech hyperscalers, to reduce reliance on Nvidia's hardware by developing custom silicon, which could potentially displace some demand for Nvidia's GPUs in the future. What Should Investors Do Now?For investors, this dip in investing in Nvidia-heavy exchange-traded funds (ETFs) could be a smart move now. When a dominant stock like Nvidia experiences a temporary setback from its peak, it can offer an attractive entry point for long-term growth. In such situations, an investor can gain even more by investing in an ETF rather than individual shares, as it will provide diversification, spreading risk across multiple companies within the tech sector while still capitalizing on Nvidia's potential.But before making a strategic decision like investing, let’s delve deeper into NVDA’s recent performance and growth prospects, so that investors can make an informed decision. A Sneak Peek Into NVDA’s Performance & Valuation Despite the slip from its 52-week high value, as mentioned above, NVDA stock inched up 0.4% in the last trading session. Year to date, the stock has surged a solid 39.4% (as of Oct. 1, 2025), comfortably beating the S&P 500’s gain of 14.7%. Over the past month, NVDA shares have soared 9.8%. From a valuation standpoint, NVDA stock is currently trading at a forward 12-month Price/Earnings ratio of 33.35X compared with the Zacks Semiconductor-General industry’s 35.60X.What Lies Ahead for NVDA?Looking ahead, factors like insatiable demand for artificial intelligence (AI) from data centers to autonomous vehicles and advanced robotics will continue to be a primary growth driver for Nvidia. In addition, the company’s continuous innovation in GPU technology, software platforms, and its expansion into new markets, such as enterprise AI solutions and the metaverse, position it for sustained growth over the long run. Although, challenges remain in the form of intensifying competition from hyperscalers and chipmakers like AMD and Intel, potential supply chain disruptions, and regulatory scrutiny in various global markets, there is no denying the fact that Nvidia remains central to the AI revolution and ETFs with heavy weightage in this company can offer risk-managed access for investors seeking exposure to one of the world’s most transformative companies.In line with this, it is imperative to mention that Nvidia’s revenue and earnings are expected to improve 56.7% and 48.8% year over year in 2025. The Zacks Consensus Estimate for 2026 also reflects a similar sturdy surge on both counts. Also, considering the upcoming five-year period, the company’s projected growth rate outpaces the industry’s expected growth. Nvidia’s expected earnings growth rate for the next five years is pegged at 32.8% versus the industry figure of 15%.Nvidia-Heavy ETFs to BuyThe following ETFs count Nvidia as a top holding, offering diversified exposure to the company and the broader technology sector, which has been rallying for some time now. VanEck Semiconductor ETF (SMH)This fund offers exposure to companies involved in semiconductor production and equipment. Nvidia holds the highest weight in SMH, constituting 19.28% of this fund’s net assets. SMH has rallied 37.8% year to date. The fund charges 35 basis points (bps) as fees.Vanguard Information Technology ETF (VGT)This fund offers exposure to information technology companies. Nvidia holds the highest weight in VGT, constituting 17.18% of this fund’s net assets. VGT has surged 21% year to date. The fund charges 9 bps as fees.Technology Select Sector SPDR Fund (XLK) This fund provides exposure to companies from technology hardware, storage and peripherals; software; communications equipment; semiconductors and semiconductor equipment; IT services; and electronic equipment, instruments and components industries. Nvidia holds the highest weight in XLK, constituting 14.86% of this fund’s net assets. XLK has surged 22.4% year to date. The fund charges 8 bps as fees.Strive U.S. Semiconductor ETF (SHOC)This fund offers exposure to the U.S.-listed semiconductor companies. Nvidia holds the highest weight in SHOC, constituting 20.91% of this fund’s net assets. SHOC has soared 38.9% year to date. The fund charges 40 bps as fees.Boost Your Portfolio with Our Top ETF InsightsZacks' exclusive Fund Newsletter delivers actionable information, top news and analysis, as well as top-performing ETFs, straight to your inbox every week.Don’t miss out on this valuable resource. It’s free!Get it now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report NVIDIA Corporation (NVDA): Free Stock Analysis Report Technology Select Sector SPDR ETF (XLK): ETF Research Reports VanEck Semiconductor ETF (SMH): ETF Research Reports Vanguard Information Technology ETF (VGT): ETF Research Reports Meta Platforms, Inc. (META): Free Stock Analysis Report Strive U.S. Semiconductor ETF (SHOC): ETF Research ReportsThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks