Has Nvidia Stock Peaked?...Management Rushes to Sell Shares

Stock Price Triples This Year, Profit-Taking Begins
S&P 500 Companies Oppose Share Buybacks
Forbes Predicts Nvidia Stock Peak

NVIDIA's stock price has tripled since the beginning of the year, prompting executives to realize profits. As executives have been selling their company shares one after another, the debate over whether NVIDIA's stock price has peaked has reignited.

Jensen Huang, CEO of NVIDIA

On the 4th (local time), Bloomberg News reported, citing Washington Services, a financial information firm, that NVIDIA executives and directors submitted documents to the U.S. Securities and Exchange Commission (SEC) indicating that they sold or intended to sell 370,000 shares of NVIDIA stock worth $180 million last month. If they disposed of the shares as stated in the documents submitted to the SEC, it is expected to be the largest monthly sale of NVIDIA treasury stock in dollar value terms over the past six years.

Insiders who have already sold or plan to sell NVIDIA shares include Deborah Shoquist, Executive Vice President of Operations; Mark Stevens, a director who has served since 2008; and Don Hudson, who joined the board in July. In particular, Director Stevens has sold hundreds of thousands of NVIDIA shares over the past few years and still holds shares worth approximately $2 billion. The company explained that most insider stock transactions were conducted based on the SEC's '10b5-1' rule, which specifies predetermined prices, quantities, and dates.

The market analyzed that executives realized profits as NVIDIA's stock price surged. Thanks to the AI semiconductor demand boom driven by the 'ChatGPT' craze, NVIDIA's stock price has risen 211% this year. NVIDIA dominates 90% of the AI semiconductor market, fully benefiting from the generative AI boom. In the third quarter of this fiscal year (August to October), NVIDIA posted revenue of $18.1 billion and earnings per share (EPS) of $4.02, surpassing analysts' expectations of $16.1 billion and $3.37, respectively, achieving an 'earnings surprise.' Shana Sissel, CEO of Vanlion Capital Management, which holds NVIDIA shares, said, "Considering how the stock price has moved, it is reasonable to cash out some of the compensation."

Some analysts suggest that the consecutive insider sales of NVIDIA shares indicate the stock price may have peaked. This is especially notable as it contrasts with recent insider share buybacks among S&P 500 companies, leading to speculation about the reasons behind NVIDIA insiders' stock disposals. According to Washington Services, the ratio of insider share sales to purchases among S&P 500 companies last month reached the highest level in six months.

Bloomberg pointed out, "While it is understandable for insiders to secure profits from the stock price surge, such share disposals undermine confidence in future rallies." In fact, NVIDIA executives and board members have not purchased a single share of the company's stock since 2020. CEO Sissel commented, "It is quite interesting that there have been many sales but no purchases by NVIDIA insiders."

U.S. economic media Forbes has already suggested that NVIDIA's stock price has peaked. Citing investment expert Peter Cohen, Forbes stated, "It is uncertain how long NVIDIA's stock price, which has risen more than 200% annually, can continue its upward trend," adding, "If NVIDIA's revenue growth slows more than expected or falls short of the company's outlook, the stock price will plummet."

This content was produced with the assistance of AI translation services.