Following Nvidia’s (NASDAQ: NVDA) stock red-hot run in 2024, its momentum has coincided with significant insider selling activity.
Nvidia has been an attractive investment thanks to its dominance in the artificial intelligence (AI) chip space. To put this growth into perspective, NVDA’s share price has gained 191% year-to-date, with a valuation of $140.22 as of press time.
Regarding selling activity, Nvidia insiders have liquidated 7,320,289 shares in 2024, totaling $939.18 million.
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Interestingly, no insider purchases have been made this year, indicating a profit-taking trend, according to data shared by charting platform TrendSpider in an X post on December 24.
Top Nvidia stock insider sellers
This selling activity has been led by CEO Jensen Huang, who netted over $700 million by selling stock under a prearranged 10b5-1 plan. Adopted in March, the plan allowed Huang to liquidate up to six million shares by Q1 2025.
Between June and September, Huang sold his stake in virtually every trading session, accounting for almost 75% of all insider trades in 2024.
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Other notable insiders who have also sold a significant stake include CFO Colette Kress, who offloaded 66,670 shares for $9 million on December 13 after a $7.7 million sale in September. Principal Accounting Officer Donald Robertson also sold 4,500 shares for $524,293 earlier in the year.
The insider selling mirrored Nvidia’s price trends, with sales spiking when the stock reached new highs. This consistent selling raised concerns among some investors over the company’s future prospects.
Historically, significant insider selling can dampen investor sentiment, as it may signal caution from those who know the company’s future best. In this case, investors reacted positively when it was revealed that Huang had completed his insider sales.
What next for Nvidia stock?
With its in-demand chips, Nvidia’s prospects are still tied to the company’s dominance in the AI space. As the stock targets the $150 mark, analysts anticipate the NVDA could reach this target by 2025, supported by strong technical indicators and other fundamentals.
Nvidia’s key area of focus is its next-generation Blackwell chips, with reports suggesting that production is progressing smoothly. Initial concerns about potential delays due to supply chain issues and overheating seem to have eased. Analysts predict the chip’s sales will peak in the first quarter of 2025.
Despite strong fundamentals, Nvidia faces challenges sustaining chip demand, with concerns that AI infrastructure spending could peak.
The company also faces stiff competition from Advanced Micro Devices (NASDAQ: AMD). For instance, in October 2024, AMD introduced the MI325X chip, designed to rival Nvidia’s H200 AI chips, with availability to customers in the fourth quarter of 2024.
In summary, as AI adoption expands, Nvidia’s long-term outlook will depend on how broadly other sectors benefit from AI, as slower infrastructure investment could follow if they don’t.
Featured image via Shutterstock
