Nvidia (NVDA) insiders have capitalized on the company's meteoric stock rise, selling shares worth more than $700 million this year. The chipmaker's stock has surged 168% in 2024, driven by booming demand for its AI accelerator chips. Executives and directors sold about 770,000 Nvidia shares, marking the highest volume in a six-month period since the first half of 2023. This massive insider selling is notable but not alarming, according to Mark Lehmann, CEO of Citizens JMP Securities, who emphasized that the compensation in stock and sustained demand for Nvidia's products are positive indicators.
A significant portion of these sales occurred after Nvidia's fiscal first-quarter earnings report on May 22, which included a better-than-expected revenue forecast and a 10-for-1 stock split announcement. Directors Mark Stevens and Tench Coxe were among the biggest sellers, while CEO Jensen Huang sold about $31 million in shares under a pre-arranged trading plan. Despite the heavy selling, there has been a notable absence of insider buying, with the last purchase being in December 2020 by CFO Colette Kress.
Market Overview:- Nvidia insiders sold shares worth over $700 million in 2024.
- Nvidia's stock surged 168% this year, driven by AI chip demand.
- Major insider sales followed Nvidia's strong earnings report and stock split announcement.
- Nvidia is the third most valuable company globally with a market cap of $3.25 trillion.
- No significant insider stock purchases since December 2020.
- The Nasdaq 100 index reached a record high, driven by Nvidia and Broadcom's (AVGO) rally.
- The AI rally shows signs of overheating, with potential for a market pullback.
- Continued strong demand for Nvidia's AI chips expected to sustain company growth.
- Investors watch for further developments in the tech sector impacting Nvidia's performance.
The rally in AI and megacap stocks like Nvidia has propelled the Nasdaq 100 index to new heights, with its 14-day relative strength index indicating an overbought condition. This suggests a potential for a pullback, though the underlying demand for Nvidia's products remains robust. The chipmaker's impressive market capitalization places it just behind tech giants Microsoft (MSFT) and Apple, underscoring its significant market position.
In addition to Nvidia's developments, other notable tech news includes Apple's (AAPL) decision to shut down its Pay Later program, the FTC's lawsuit against Adobe (ADBE), Huawei's potential new revenue strategy for its Harmony OS, and CuspAI's successful funding round and advisory board recruitment of AI pioneer Geoffrey Hinton.
