Nvidia (NASDAQ:NVDA) is one of the hottest stock topics of 2023 so far. With Big Tech back on the menu for investors seeking high-growth opportunities, NVDA stock is pulling away. Thanks in large part to its role in the artificial intelligence (AI) mania, NVDA has been on quite a price run. This week, though, it appears some investors want out while the getting is good.
Two fresh insider sales show that those within the company are seeing the recent high as a good opportunity to take some profits. Filings aggregated on Finviz show two directors, Mark Perry and Dawn Hudson, have sold off shares in the last week. Hudson sold 7,500 NVDA shares at $230.40 for a profit of over $1.7 million. Perry sold a much larger stake of 20,000 shares at a price of $236.37 for a profit of over $4.7 million. As it stands now, Hudson and Perry hold 90,350 and 140,000 shares, respectively.
These filings come after a busy January for insiders NVDA trades. Several directors and executives initiated trades of a cumulative 309,273 shares in the first month of the year. Of course, these sales occurred before the company’s fourth-quarter earnings report on Feb. 22. While this report was expected to disappoint, it ended up prompting an immediate upswing, thanks largely to Nvidia’s leaning into ongoing AI hype.
NVDA Stock Living Up to AI Hype
The rise in NVDA stock sentiment comes as part of a larger shift in attitude toward tech. The market was beaten in 2022 as a result of Federal Reserve policies and inflation. But, getting into 2023, speculative investing has seen a bit of a comeback, tech more so than others. The reason for this is an explosion in AI interest, of which Nvidia has been a major topic.
Nvidia has been associated with many hyped tech fads like blockchain and, more recently, the metaverse. AI is the newest buzzword propelling the company, but unlike previous fads, the company’s role seems much more prominent. As it stands now, Nvidia holds 95% of the market share for graphics processors used to train deep-learning AI models. This is thanks to its A100 processor. So, even with earnings that did not bring many sales or high revenue, executives have been able to tap into this hype to send NVDA rocketing nonetheless.
The gains may slow down in the next several weeks, given that the company is preparing a mixed shelf offering. Typically, these announcements precede a dip as a result of dilution fears. This could explain why insiders have chosen to take some profits in recent days. Nonetheless, NVDA stock is seeing a gain of about 1% today.
On the date of publication, Brenden Rearick did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
