Insiders at Nvidia Corp. have reportedly sold more than $700 million in stock so far this year as the company’s stock price continues to rise. This trend comes as demand for AI accelerator chips, a market in which Nvidia holds a strong position, continues to grow. The total number of shares sold by executives and directors in 2024 is around 770,000, marking the highest half-year total since 2023.
The significant increase in the value of shares sold this year is directly related to Nvidia’s stock price surge of 164% in 2024. Notably, a significant portion of the shares sold after Nvidia’s fiscal first-quarter earnings report in May. While there have been large sales by insiders, very few purchases have been made, except for one by CFO Colette Kress in December 2020.
Despite the high volume of insider selling, analysts like Marcos Lehmann from Citizens JMP Values suggest that there is no cause for immediate concern, as part of executives’ compensation is based on stock. Additionally, there seems to be ongoing strong demand for Nvidia’s products.
The recent spike in Nvidia’s stock price has led to some concerns about a possible market overheating, especially in the AI sector. The Nasdaq 100 index, buoyed by major tech stocks like Nvidia, has reached record levels, raising questions about a potential pullback. According to experts like Ram Ahluwalia from Lumid Wealth, Nvidia’s dominance in the market could be impacting the performance of other stocks as investors flock to the tech giant.
The report follows Nvidia’s 10-for-1 stock split in June, a move aimed at making shares more accessible to employees and investors. While this decision was met with optimism by some, Goldman Sachs warned investors to expect limited long-term benefits from stock splits. Nvidia’s market capitalization hit $3 trillion in June, making it the third company to reach this milestone alongside Apple and Microsoft.
As of Tuesday, Nvidia’s stock was trading slightly higher in pre-market at $131.75, following a previous close of $130.98. Despite recent insider selling and concerns about market overheating, analysts remain cautiously optimistic about Nvidia’s future performance in light of ongoing strong demand for AI-related products.
Article Source
https://www.benzinga.com/news/24/06/39378267/nvidia-insiders-cash-in-over-700m-this-year-as-jensen-huang-3-2-trillion-chip-empire-continues-to-sw