Jensen Huang, CEO of Nvidia (NVDA), sold 225,000 shares of the semiconductor company worth $38.6 million on August 29 as part of a prearranged 10b5-1 trading plan disclosed in March. The plan allows him to sell up to 6 million shares through year-end.
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It’s important to note that a corporate insider’s stock sale doesn’t always signal caution about the company’s future potential. They may sell shares for various reasons, including financial or personal obligations.
CEO Sale Coincides With Stock Drop after Earnings Report
The sale comes just days after Nvidia reported its Q2 earnings results on August 27. While the company posted a strong beat on both revenue and earnings, its data center unit came in lighter than Wall Street had hoped. The segment generated $41.1 billion in sales, up 56% from a year earlier, but still short of lofty expectations. Analysts said the shortfall likely reflects Nvidia’s struggle to get enough of its top GPUs into the market.
More recently, the stock slipped below its 50-day moving average (DMA) for the first time after Nvidia dismissed reports of supply shortages tied to its new Blackwell chips. Many traders believe demand for the Blackwell GPUs is higher than what Nvidia can currently deliver.
Insider Confidence Signal Is Negative for NVDA
NVDA stock currently has a Very Negative Insider Confidence Signal on TipRanks, based on Informative Sell transactions worth $438 million, undertaken in the last three months.
It is important to keep an eye on the Informative trades of corporate insiders, given their knowledge of a company’s growth potential. Interestingly, TipRanks offers daily insider transactions as well as a list of top corporate insiders. It also provides a list of hot stocks that boast either a Very Positive or Positive insider confidence signal.
Is NVDA a Strong Buy?
Turning to Wall Street, analysts have a Strong Buy consensus rating on NVDA stock based on 34 Buys, three Holds, and one Sell assigned in the past three months. Further, the average NVDA price target of $211.86 per share implies 24.17% upside potential.
