So far this year, insiders at NVIDIA (NVDA, Financial) have sold more than $1.8 billion worth of stock, and more sales are on the horizon. According to data compiled by Washington Service, NVIDIA executives and directors have sold nearly 11 million shares in 2024, marking the highest level since 2020. Although these sales represent a small fraction of NVIDIA's total shares, they are happening as investors are anxious about the delayed launch of NVIDIA's Blackwell series chips and the sustainability of artificial intelligence-related spending.
NVIDIA insiders are planning additional stock sales. Recently, CEO Jensen Huang completed a pre-arranged trading plan, selling 6 million shares. Mark Stevens, a director at NVIDIA, has also applied to sell another 3 million shares through a trust, after selling 1.6 million shares earlier this year.
Mike Bailey, research director at Fulton Breakefield Broenniman, noted that such a level of insider selling does not inspire confidence but should be considered in context. For potential NVIDIA investors, these sales might be a reason to hesitate. Jensen Huang executed his 10b5-1 plan, selling around $713 million worth of NVIDIA stock from mid-June to mid-September, during which NVIDIA's stock price fell by approximately 5%. Despite these sales, Huang still holds over $100 billion worth of NVIDIA stock.
Other significant sellers include Mark Stevens and fellow director Tench Coxe, cashing out approximately $390 million and $525 million worth of NVIDIA stock, respectively, this year.
Over recent months, NVIDIA's stock has faced pressures, including concerns over the longevity of AI spending. Janus Henderson portfolio manager Denny Fish identified this as a major factor, noting that conclusions will be clearer with the sales data of the Blackwell chips in 2025.
NVIDIA's stock has experienced volatility since June, when the company briefly surpassed Microsoft and Apple in market capitalization. Investor worries about the return on investment in AI have led to two corrections exceeding 20%. However, the stock has rebounded and is currently about 10% higher than its June 18 peak.
Despite upcoming insider sales, investors should not necessarily interpret these as bearish signals, especially if pre-planned. Ken Mahoney, CEO of Mahoney Asset Management, stated that insider buying or selling has poor correlation with long-term stock performance. NVIDIA's CEO selling stock should not be seen as a sign of slowing growth; rather, his view is the opposite.
