NVIDIA Corporation (NASDAQ: ) President and CEO Jensen Huang recently sold a large amount of company stock, according to a new SEC filing. These transactions occurred between June 20 and 21, 2024, and involved the sale of Nvidia stock worth a total of more than $31 million.
Prices for the sale varied, ranging from $124.7483 to $140.2401 per share. The transactions were part of a prearranged trading plan under Rule 10b5-1, which allows company insiders to sell stock at predetermined times to avoid insider trading charges.
Huang’s trading began on June 20, with sales ranging from $129.72 to $139.99 per share, and continued the next day, with sales ranging from $124.38 to $140.70 per share. The exact number of shares sold at each price point within these ranges is available upon request from the SEC, Nvidia or its security holders.
This series of stock sales significantly reduced Huang’s direct ownership in the company, although he still retained indirect ownership of millions of shares through various trusts and partnerships. Notably, a gift transaction was also reported, whereby Mr. Huang transferred 445,000 shares without compensation, which were held by a trust of which he was the trustee.
While it’s common for company executives to sell stock, often for personal financial reasons, a deal of this magnitude can attract the attention of investors and the market. It’s worth noting that despite these sales, Huang still maintains a large stake in Nvidia through indirect holdings.
Investors often monitor insider trading for hints about executives’ confidence in their company’s future prospects. However, sales under a 10b5-1 deal plan are often prearranged and do not necessarily represent senior executives’ market prospects.
Nvidia has not yet made any statement regarding the transactions, and business continues as usual for the semiconductor giant.
In other recent news, Nvidia has been experiencing significant growth due to its dominance in supplying artificial intelligence chips, with its revenue expected to double to $120 billion this fiscal year and climb to $160 billion the following year. However, some analysts, such as DA Davidson’s Gil Luria, expressed caution about Nvidia’s future growth. On the other hand, Nvidia’s stock price has fallen recently, causing it to lose its status as Microsoft’s (NASDAQ: ) most valuable company. The decline ended a seven-day streak of new closing highs for the Nasdaq.
Meanwhile, U.S. investors withdrew money from stock funds for the second week in a row, with net outflows reaching $8.37 billion. Despite outflows, the S&P 500 and Nasdaq:NVDA hit all-time highs, driven by strong performance from companies like Nvidia. On the other hand, U.S. stock index futures fell slightly, affected by the decline in the stock prices of large technology companies such as Nvidia.
These developments reflect the latest trends in the technology industry and financial markets. Investors and analysts will continue to monitor the situation closely as they consider the implications for their investment strategies.
Investment Professional Insights
Nvidia Corporation (NASDAQ: NVDA ) has been a topic of concern for investors after President and CEO Jensen Huang recently sold insider stock. In the dynamic semiconductor industry, understanding a company’s underlying financial health and market performance is critical. Here are some insights based on live data and InvestingPro Tips:
Investment professional data:
- Market cap (adjusted): $3.11 trillion, reflecting Nvidia’s massive size and influence in the market.
- Price-to-earnings ratio: 73.46. The valuation is relatively high, indicating investors’ expectations for high growth in the future.
- Revenue growth in the first quarter of 2023 (quarterly): 262.12%, showing Nvidia’s revenue has grown significantly.
Tips from investment experts:
- Nvidia’s Piotroski score remained at 9, a strong indicator of the company’s financial stability.
- Analysts have upgraded earnings for the period ahead, with 36 of them predicting continued growth for the stock, which could be a positive sign for investors considering the stock’s future prospects.
For those who wish to delve deeper into Nvidia’s financials and gain a more complete insight, there are additional InvestingPro Tips available. Subscribers get access to a wealth of expert analysis, including tips on sales growth, profitability and stock volatility. Use coupon code PRONEWS24readers can receive an additional 10% discount for annual or bi-annual Pro and Pro+ subscriptions.
Nvidia’s solid financial performance, coupled with its status as a well-known player in the semiconductor and semiconductor equipment industries, provides a backdrop for insider trading activity. While the CEO’s recent stock sales are noteworthy, the company’s strong revenue growth and analysts’ positive outlook may reassure investors about its continued potential.
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