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Nvidia Insiders Are Selling: A Sign the Stock Has Hit Its Top?

Published 2024/06/24, 21:19
NVDA
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Nvidia Corporation (NASDAQ:NVDA), the powerhouse behind AI chip technology, has been making headlines with its meteoric rise in valuation and recent insider selling activity. The company briefly surpassed Microsoft (NASDAQ:MSFT) as the world’s most valuable before returning to second place.

Meanwhile, Nvidia’s stock has shown remarkable growth, outperforming the S&P 500 across various timeframes despite recent downward pressure.

Nvidia Insiders Are Selling

In recent weeks, Nvidia has seen a flurry of insider selling activity. CEO Jen-Hsun Huang sold 240,000 shares on June 20, 2024, netting approximately $31.6 million, while CFO Colette Kress offloaded 100,000 shares the following day for about $12.7 million.

Other notable sales include Director Mark A. Stevens’ disposal of 470,000 shares for roughly $58.3 million on June 11, and Director Tench Coxe’s sale of 100,000 shares for approximately $119.5 million on June 7.

Over the past few months, this consistent selling pattern among executives and directors has raised eyebrows among investors. While some sales appear to be part of pre-planned trading schedules, others may be opportunistic, given the stock’s significant price appreciation. However, it’s worth noting that despite these large sales, many insiders still retain substantial holdings in the company.

Is NVDA Stock Due for a Correction?

The selling of insiders coincides with Nvidia’s brief reign as the world’s most valuable company. The chip maker’s valuation peaked at $3.34 trillion before a 3.5% drop in share price on an unspecified Thursday caused its market value to fall to around $3.22 trillion. This allowed Microsoft to reclaim the top spot with a steady valuation exceeding $3.3 trillion. This fluctuation underscores the intense competition among tech giants, with Nvidia, Microsoft, and Apple (NASDAQ: NASDAQ:AAPL) boasting over $3 trillion valuations.

On Friday, Nvidia’s stock closed at $126.57, with a market capitalization of $3.113 trillion. The company’s P/E ratio stands at 74.06, while its forward P/E is 48.78. Nvidia has demonstrated impressive financial performance, with trailing twelve-month revenue of $79.77 billion and net income available to common shareholders of $42.6 billion.

The stock’s year-to-date return of 155.62% significantly outpaces the S&P 500’s 14.57% gain. Despite recent selling pressure, analyst consensus remains a Strong Buy, with price targets ranging from $47.84 to $200.00 per share.

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Neither the author, Tim Fries, nor this website, The Tokenist, provide financial advice. Please consult our website policy prior to making financial decisions.

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