Although the market is still buying heavily, executives of AI (artificial intelligence) chip giant Nvidia have begun to reduce their holdings and cash out.
On December 4th local time, according to data provided by data provider The Washington Service, Nvidia executives and directors submitted documents in November indicating that they have sold or plan to sell a total of approximately 370000 shares, with a total value of approximately $180 million. If these stocks were all sold, it would be Nvidia's largest monthly sell-off in US dollars for at least six years.
After the news spread, Nvidia's stock price closed at $455.1 on the 4th, down 2.68%, with a total market value of $1.1 trillion, and its market value evaporated by $31 billion in one day.
Since the beginning of 2023, Nvidia's stock price has risen more than twice, but most of the increase was recorded in the first half of the year, and the stock price has also begun to show signs of weakness. On November 21st, Nvidia released its financial report for the third quarter of the 2024 fiscal year as of October 29th, achieving revenue of $18.12 billion, a year-on-year increase of 206%, far exceeding market expectations of $16.2 billion. However, Nvidia has also made it clear that its performance for the next quarter will be negatively affected by US chip export restrictions. Since then, Nvidia's stock price has fallen by over 6%.
According to foreign media analysis, it is normal for insiders to lock in profits after the company has shown excellent performance. However, Nvidia's selling behavior is unlikely to inspire market confidence in a future rebound. According to The Washington Service, since 2020, Nvidia insiders have hardly made any further stock purchases.
Among the four Nvidia insiders who disclosed their stock sales or potential sales in November, including Mark Stevens, a long-term board member of the company. Stevens has been a director of Nvidia since 2008 and former Managing Director of Sequoia Capital, a venture capital firm. He submitted a 144 form known as the "Notice of Proposed Sale of Securities" on November 24th this year, planning to sell 300000 shares. On November 24th and November 27th, he sold 10280 shares respectively, accounting for the largest portion of this internal sale.
According to data compiled by foreign media, Stevens has sold hundreds of thousands of shares in the past few years and still holds approximately $2 billion worth of Nvidia shares. Other insiders planning to sell stocks include Debora Shoquist, Executive Vice President of NVIDIA Operations, and Dawn Hudson, who joined NVIDIA's board of directors in July this year.
Shana Sissel, CEO of Banrion Capital Management, a capital management company that holds NVIDIA stocks, said, "There was a lot of selling but not buying, which is indeed quite interesting. Considering NVIDIA's stock price performance, it makes sense to take advantage of the opportunity to monetize a portion of the compensation."
A representative from Nvidia stated that the majority of stock price sales are based on the US Securities and Exchange Commission's 10b5-1 plan, which determines the price, quantity, and date of sales in advance.
On the other hand, according to The Washington Service, many insiders in the S&P 500 company increased their efforts to purchase their own company stocks in November, and the ratio of buyers to sellers is expected to reach its highest level in six months.
According to FactSet data, currently, 51 out of 54 analysts give Nvidia stocks a "buy" or "outperform" rating, while the remaining 3 give them a "hold" rating. The average target price given by analysts to Nvidia is $667.43.