Over the last two years, semiconductor companies have been in a very favorable environment. With the ongoing artificial intelligence rally causing a huge uptick in demand for their products, these businesses have seen their valuations skyrocket.
Nowhere is this more apparent than with Nvidia (NASDAQ: NVDA) — an industry leader that is in contention to be the first company that will reach a $4 trillion market capitalization. But there’s a catch — as it always happens with continued outperformance, it’s becoming increasingly hard for Nvidia to impress its investors.
On November 20, the semiconductor venture released its Q3 FY2025 earnings report. It was a success — but apparently not to the extent that the markets were hoping for. Aggressive profit-taking ensued, and Nvidia stock saw prices go from $145.89 at the time to $128.71 at press time — equating to an 11.77% drop.
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In fact, over the last week, NVDA shares have marked a 7.32% loss, bringing the monthly price change to a negative 12.31%. While year-to-date (YTD) returns are still at an impressive 167.61%, the fact that this slump has lasted for so long has led even more investors to lock in their profits by selling.
Most notably, in mid-December, one of the tech titan’s earliest investors joined in on the action — selling a portion of his Nvidia stock holdings worth more than $100 million.
Tench Coxe sells $131 million in Nvidia stock
According to data retrieved by Finbold’s insider trading radar from an SEC Form 4 filing made public on December 18, Tench Coxe, a member of Nvidia’s board of directors, executed three sales on December 16.
First, a little background — Coxe, once the managing director of Sutter Hill Ventures, one of the oldest venture capital firms still in existence, bought Nvidia shares in 1997 — two years before the company’s initial public offering (IPO). To this day, he remains Nvidia’s third-largest individual shareholder.
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Back to the present — the three transactions Coxe made on December 16 were executed at prices ranging from $131.03 to $132.46. The director sold 1,000,000 units of NVDA stock in total — worth approximately $131,263,863.
Interestingly enough, a closer look at the filing reveals a rare sight — a sale of this magnitude that was not pre-arranged. Usually, insiders execute these trades via 10b5-1 plans, which have to be scheduled months in advance.
While Nvidia remains an industry leader with amazing growth prospects, it’s beginning to look like the slump will last a bit longer than expected. Without context, a key insider selling a million shares seems like quite the bearish sign — but readers would be wise to remember that Coxe continues to hold 32 times as many shares, split between direct ownership and retirement plans.
Featured image via Shutterstock
