Today, it is high time to explore what Nvidia is and how insiders are making millions in 2024. If you’ve ever considered what it means to be a chip in an empire, then this is for you.
Imagine this: Nvidia, the tech giant that has powerful chips in its portfolio, can only be referred to as a golden goose that lays golden eggs. Some individuals within the company have been hard at work accumulating those golden eggs through 770,000 direct sales of its share. Were that many shares issued, yes? But wait, there’s more! This figure does not include the company’s significant 10-for-1 stock split that took place on June 10. To give a historical comparison, this is the highest number of shares sold in a half-year since the first half of 2023 when 848,000 shares were sold.
Well, why is this happening? Well, Nvidia’s stock price has risen to an unbelievable 164% in 2024. I feel that is like watching a rocket flying into space! This upswing is mainly because Nvidia is in the business of selling AI accelerator chips, and do you know what? They are a leading company in that segment.
Insiders have sold shares after Nvidia’s Report of the fiscal first-quarter ended May 22, and over a third of them have been floated. Some of the biggest sellers include directors Mark Stevens, and Tench Coxe. And here’s a fun fact: For about $31 million, the CEO Jensen Huang himself has been the active participant in selling of the shares through a pre-arranged plan.
Yet, while the insiders are selling, there are few among them who are buying the stock of the companies in question. Indeed, the most recent major insider transaction was completed back in December 2020 when the company’s CFO Colette Kress acquired shares worth $107,390. It’s almost as if everyone at Nvidia woke up one day and decided they wanted to sell their tickets to the hottest concert of the year, but there were no takers.
This selling spree should not be of much concern as pointed out by Mark Lehmann, CEO at Citizens JMP Securities. He relates it to how some employers use shares to reward their workers rather than cash. It is something in the strategy and consumers are still keen on Nvidia products. Well, there is no reason to panic just yet then!
Next, let’s focus on the 10-for-1 stock split that occurred in June. This was supposed to increase the opportunity for employees and investors to be able to trade Nvidia’s shares. But Goldman Sachs has indicated that this is typical of most stock splits, and investors should not look for a continuous celebration.
The rally being driven by AI might be heating up a little too much for Nvidia’s own good. The Nasdaq 100 index has reached a new record high, thanks to mega-cap stocks like Nvidia and Broadcom Inc. But here’s a warning: This level of the 14-day relative strength index is the highest it has been since 2018 suggesting that a pull back could be on the cards.
Ram Ahluwalia of Lumida Wealth says that Nvidia is a vigorous force making other stocks drop because people are shifting their portfolio towards Nvidia. This trend, coupled with the aforementioned insider selling, may affect Nvidia’s share price in the future.
Nvidia has done even better in June, reaching a $3 trillion market cap. Yes you guessed it right, Nvidia was now in the big boys league with Apple and Microsoft as the third company to accomplish this incredible achievement.
