Nvidia Corp (NASDAQ:NVDA) has reported that its President and CEO, Jen-Hsun Huang, sold shares worth more than $29 million in a series of transactions dated June 28 and July 1, 2024. The sales were conducted at prices ranging from $118.945 to $127.1861 per share, according to the company's latest SEC filing.
The transactions were part of a pre-arranged trading plan under Rule 10b5-1, which allows company insiders to set up a predetermined plan to sell stocks at a certain time or price. This plan provides executives with the ability to sell their shares without facing potential accusations of insider trading.
On June 28, Huang sold a total of 116,750 shares in multiple transactions at weighted average prices that varied from $122.9018 to $126.3882. On July 1, the CEO continued to offload shares, with sales totaling 84,949 shares at weighted average prices between $118.945 and $124.2454.
Following these transactions, Huang still retains a significant portion of Nvidia stock, directly and indirectly, through various trusts and partnerships. Directly, Huang holds 79,974,995 shares after the sales. Indirectly, shares are held by trusts and partnerships such as the Jen-Hsun & Lori Huang Living Trust, J. and L. Huang Investments, L.P., The Huang 2012 Irrevocable Trust, The Huang Irrevocable Remainder Trust, The Lori Lynn Huang 2016 Annuity Trust II Agreement, and The Jen-Hsun Huang 2016 Annuity Trust II Agreement, among others.
These sales come at a time when Nvidia continues to be a dominant force in the semiconductor industry, known for its graphics processing units (GPUs) for gaming and professional markets, as well as system on a chip units (SOCs) for the mobile computing and automotive market.
Investors and analysts often look at insider sales to gauge their confidence in the company's future prospects. However, it is important to note that insiders may sell shares for various reasons, including diversifying their portfolio, tax planning, or personal financial management, which do not necessarily indicate their outlook on the company's future performance.
The transactions were signed off by Rebecca Peters, Attorney-in-Fact for Jen-Hsun Huang, on July 2, 2024.
In other recent news, NVIDIA has seen significant developments. The company's shareholders approved key proposals at the annual meeting, including the election of all twelve director nominees, approval of executive compensation, and ratification of PricewaterhouseCoopers LLP as the independent registered accounting firm. NVIDIA also faced antitrust charges in France, marking the first time the company has faced such allegations.
Cantor Fitzgerald maintained its Overweight rating on NVIDIA and increased the stock's price target to $175 from $140, citing the company's role in driving technological innovation and reducing computing costs. The firm also noted NVIDIA's rapid technological advancement and its potential for further growth in the AI sector.
In the first half of 2024, NVIDIA contributed significantly to the tech sector's overall 30% leap, with a staggering 150% increase. The company also briefly surpassed Microsoft (NASDAQ:MSFT) in market value, with its shares climbing up to 27%, raising its market value to $3.34 trillion. However, this peak was short-lived due to profit-taking activities and concerns over its high valuation. These are recent developments in the company's progress.
InvestingPro Insights
As Jen-Hsun Huang, President and CEO of Nvidia Corp (NASDAQ:NVDA), executes a pre-arranged plan to sell a portion of his stock, investors are keen to understand the financial health and market position of the company. Nvidia's robust presence in the semiconductor space is reflected in its financial metrics and market performance. With a staggering market capitalization of $3010.0 billion and a significant revenue growth of 208.27% in the last twelve months as of Q1 2025, Nvidia's financial strength is apparent.
InvestingPro Tips highlight that Nvidia has maintained a perfect Piotroski Score of 9, indicating strong financial health, and analysts anticipate sales growth in the current year. These factors may offer reassurance to investors concerned about insider sales, suggesting that the company's fundamentals remain solid. Additionally, with a gross profit margin of 75.29% in the same period, Nvidia demonstrates its ability to translate sales into profits efficiently.
However, the company is trading at a high earnings multiple with a P/E ratio of 71.23, suggesting that the stock price reflects high investor expectations for future earnings growth. This is further supported by the high Price / Book multiple of 61.35. Investors considering Nvidia's stock should weigh these valuation metrics against the company's growth prospects and industry position.
For those looking to delve deeper into Nvidia's financial details and future outlook, InvestingPro offers 20 additional tips for a comprehensive analysis. Use coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription, which includes further insights and metrics that could guide investment decisions.
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