Jen-Hsun Huang, CEO of chipmaker Nvidia (NVDA), sold additional shares worth $27.57 million. The CEO of one of the world’s most popular AI (artificial intelligence) players continues to offload its stock, as previously informed under Rule 10b5-1 in March 2024. The rule informs shareholders about the insider’s intent to sell shares as per a predetermined trading plan.
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A corporate insider’s share sale usually signals caution about the company’s future potential. However, an insider might sell shares for other reasons, such as financial or personal obligations.
NVDA Stock is Under Pressure
Nvidia stock is under pressure due to investors’ softening expectations from the company’s AI investments. The stock lost $279 billion of its value on one single trading day. At the same time, Huang saw his net worth plunge by roughly $10 billion on September 3, bringing him down to the 16th position from 14th on Forbes’ Real-Time Billionaires List.
In another interesting turn of events, a Bloomberg report on Tuesday stated that Nvidia was subpoenaed by the U.S. Justice Department as part of a probe into its anticompetitive behavior. However, a Nvidia spokesperson confirmed that the company had not received any subpoena from the DOJ.
Despite the ongoing challenges, NVDA shares have gained 114.5% so far this year.
A Closer Look at the Insider’s Transactions
As per the Form 4 filed with the SEC on September 4, Huang sold multiple tranches of Nvidia shares between August 30 and September 3. The shares were sold at weighted average prices ranging between $107.8088 and $121.2909 apiece. Unfortunately, Nvidia’s share price collapsed by 9.5% on September 3 due to the reasons noted above, fetching Huang lower profits.
It is worth noting that even after the latest Uninformative Sell transaction, Huang still owns $93.09 billion worth of Nvidia shares, both directly and through various trusts.
Nvidia stock currently has a Negative Insider Confidence Signal on TipRanks, based on Informative Sell transactions worth $332.2 million undertaken in the last three months. Huang’s Uninformative Buy/Sell trades are not included in this Signal.
It is important to keep an eye on the Informative trades of corporate insiders, given their knowledge of a company’s growth potential. Interestingly, TipRanks offers daily insider transactions as well as a list of top corporate insiders. It also provides a list of hot stocks that boast either a Very Positive or Positive insider confidence signal.
Is Nvidia a Buy, Sell, or Hold?
Despite the short-term challenges, analysts remain highly optimistic about Nvidia stock’s trajectory. On TipRanks, NVDA stock commands a Strong Buy consensus rating based on 39 Buys and four Hold recommendations. Also, the average Nvidia price target of $151.79 implies 42.9% upside potential from current levels.
