Several Nvidia leaders have cashed in on their shares as the company experiences an extraordinary surge in stock prices. The California-based GPU giant's market capitalization has soared to $3.012 trillion, briefly outpacing Apple and just trailing Microsoft in global market value. Nvidia's stock has appreciated by 144 percent so far in 2024 and 211 percent over the previous year, driven by burgeoning demand for AI technologies.
Nvidia Executives Sell Shares Amid Record Stock Surge
According to investor portal Barron's, numerous Nvidia executives have capitalized on the stock's high prices by selling shares. Regulatory filings from late May reveal that CEO Jensen Huang sold approximately 600,000 shares, netting around $650 million. Other high-ranking officials, including Nvidia CFO Colette Kress, EVP of operations Debora Shoquist, and EVP of worldwide field operations Jay Puri, have similarly offloaded significant portions of their holdings.
Stock Split and Market Reactions
The sales occurred before a 10-for-1 stock split was implemented after the US markets closed last week. There was a dip in Nvidia's share price on the days affected by the stock sales, but analysts believe the stock split will boost Nvidia's performance in the long run. After the split came into effect on Monday, June 10, Nvidia´s stock took a breath for 1-2 days, reaching already a new all-time high on Wednesday.
The company posted a record-breaking $26 billion in revenue for its fiscal Q1 2024, which ended in April, yet some investors are concerned about whether this growth can continue.
Future Growth and Market Sentiment
Morningstar forecasts Nvidia's revenue will increase by an additional $3 billion per quarter throughout the current fiscal year, continuing into fiscal 2026. However, they predict revenue growth in the datacenter segment will slow to low-teens percentages in the following years. Some investors are already positioning themselves against Nvidia, expecting a price decline. Meanwhile, AMD saw its shares drop in early trading after being downgraded by Morgan Stanley, which argued that investor expectations for AMD's AI segment were too high.
Morgan Stanley analysts acknowledge AMD's robust presence in core markets but express skepticism about its capacity to justify a premium valuation. They, however, believe that, unlike custom silicon options, AMD GPUs could match Nvidia's ability to operate across various cloud environments, providing cloud providers a way to avoid dependency on a single vendor.
Last Updated on June 13, 2024 12:41 pm CEST
