It’s a big payday for Nvidia directors who have started cashing in on the chip giant’s meteoric rise. Immediate regulatory filings indicate that Tench Coxe and Mark Stevens are the latest to sell $180 million worth of shares in the chip giant even as the chip giant continues to edge higher.
Nvidia Insider Selling
A former managing director at venture capital firm Sutter Hill Ventures, Coxe sold 200,000 shares on March 5 at between $850 and $852. Fillings indicate that the director still holds more than 3.7 million shares in the company, which is even more valuable as the stock has already powered through the $900 a share level. Stevens, on the other hand, is believed to have sold 12,000 shares for between $852 and $855 a share.
Last month, other directors took advantage of a stellar earnings call that propelled the chip giant to all-time highs to unload close to 99,000 shares in the company. The shares sold at the time were worth more than $80 million, marking the first time that directors had sold significant shares.
The sale does not come as a surprise, as Nvidia has been in explosive form despite rallying by over 230% last year. The stock is already up by more than 70% year to date amid growing optimism of robust sales for its chips in artificial intelligence computing. The stock has already rallied to highs of $914 a share for a market value of over $2.2 trillion and currently is the third largest company by market value, only trailing Microsoft and Apple in the S&P 500.
Nvidia’s meteoric rise to a trillion-dollar company comes with the company benefiting from the artificial intelligence frenzy. The company has continued to post record-breaking earnings and revenues fuelled by solid demand for its chips. The blockbuster earnings have cemented optimism that artificial intelligence spending remains strong and can only continue to rise.
Nvidia Short Selling
While Nvidia’s explosive run has translated to significant returns for buyers, the same cannot be said about short sellers who have smoked out. As of the end of February, short sellers had accumulated over $4 billion in paper losses as the stock continued to make higher highs in the market.
Ahead of releasing the company’s fourth-quarter earnings results, short sellers had ramped up the short bets, arguing that the stock was due for a correction owing to its sky-high valuation. At the time, the stock was the third largest US short, with $18.3 billion shares in shorts. Short sellers who did not exit their position have incurred significant losses as the price rises.
Nvidia’s meteoric rally has had a ripple effect in the broader semiconductor sector, with major chip companies also registering significant gains. Advanced Micro Devices and Taiwan Semiconductor have also been in explosive form, registering double-digit percentage gains in the market. Semiconductor stocks remain the worst-performing sector for short sellers as the industry has continued to edge higher amid the artificial intelligence frenzy.
A rally of the artificial intelligence-linked stocks and optimism about the US Federal Reserve easing monetary policy remain the main ingredients driving gains in the equity markers. US stocks have been on a tear amid expectations that the FED will embark on rate cuts.
