With U.S. markets closed today for the Fourth of July celebration, the Nasdaq closed at an all-time high. Speculators returned to buying artificial intelligence suppliers. Nvidia (NVDA) gained 4.57% on Wednesday, despite the CEO selling 1.3 million shares.
CEO Jensen Huang took advantage of Nvidia’s stock rising by 226.99% from its 52-week low. He locked in $169 million in stock sales from June 28 through July 2, 2024. Huang still owns 865 million shares.
Amazon (AMZN) executive Chair Jeff Bezos sold 25 million shares for $4.93 billion. Additionally, he donated 1.09 million shares to non-profit organizations between May 29 – 30. Bezos has a plan to sell up to 50 million shares before Jan. 31, 2025. Markets are not concerned with insider selling. Bezos still owns 950 million shares.
Although retail investors may treat insider selling as immaterial, they should also follow them. Nasdaq trades at a forward price-to-earnings ratio of 35.4 times. It is at multiples not seen since the Y2K bubble (in the year 2000). Markets continue to ignore the Federal Reserve’s delayed interest cut of 25 bps. Speculators are pricing accelerated future growth for the tech sector. They overlooked sales declines in Tesla (TSLA) and Apple (AAPL) in the last quarter. This increases the risk of profit-taking pressures in the quarter ahead.
