Chip maker Nvidia (NVDA) disclosed in a recent SEC filing that its CEO, Jensen Huang, sold approximately $35.55 million worth of company stock on July 7. The sale involved 225,000 shares, which were offloaded in several transactions at prices ranging from $153.04 to $160.94 per share. Unsurprisingly, insider stock sales often grab attention, especially when they involve high-profile executives like Huang, because they may be a sign that management is losing confidence.
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However, it’s important for investors to understand the broader context. In fact, after these sales, Huang still owns over 75 million shares of Nvidia, which means that he is still strongly aligned with the company’s long-term performance. Executives often sell shares for routine financial planning or diversification. Indeed, this is actually part of Huang’s plan to sell 6 million shares through what’s known as a 10b5-1 trading plan. It is worth noting that Huang put his specific plan into place on March 20, and it will run through the end of the year on December 31.
As a result, this news should not be treated as a red flag for Nvidia shareholders, especially since the stock has been in the spotlight due to its leadership in the AI chip market. While it’s smart to monitor insider selling trends over time, this individual transaction, along with Huang’s trading plan, shouldn’t cause worries. Instead, long-term investors should focus more on Nvidia’s fundamentals and growth outlook rather than a single executive’s selling.
What Is a Good Price for NVDA?
Turning to Wall Street, analysts have a Strong Buy consensus rating on NVDA stock based on 35 Buys, four Holds, and one Sell assigned in the past three months, as indicated by the graphic below. Furthermore, the average NVDA price target of $175.97 per share implies 10.1% upside potential.
