In my opinion, the recent sale of Nvidia shares by CEO Jensen Huang might not necessarily be a cause for concern. My considerations are as follow:
1. Insider Sales: Jensen Huang's sales were part of a pre-determined trading plan related to his compensation package, including restricted stock units (RSUs) and performance stock units (PSUs). This means the sales were planned and not necessarily a reflection of his outlook on Nvidia's future. As investors, it is important for us not to miss the forest for the trees and avoid reading too much into a relatively small move from Jensen Huang.
2. Company Fundamentals: Nvidia remains a leader in the semiconductor industry, particularly in AI and gaming. The company's strong financial performance and market position suggest continued growth potential. Based on recent quarterly earnings call for Amazon, Alphabet, Meta and Microsoft, prospects for Blackwell remain very good.
3. Market Reaction: Despite the insider sales which puts downward pressure on prices, Nvidia's stock price has shown resilience, rebounding to around $105 on August 9, 2024. This indicates investor confidence in the company's long-term prospects.
4. Analysts remain bullish on Nvidia, with an average 12-month price target of approximately $130.88 (https://stockanalysis.com/stocks/nvda/forecast/). This suggests a significant upside from the current price, reinforcing the positive outlook.
Regarding whether Nvidia will hold $100 in August, it is challenging to predict short-term price movements with certainty. However, I am hoping the price to hit $90 as that is my target price with margin of safety though given the company's strong fundamentals and positive analyst sentiment, it is plausible that Nvidia could maintain or exceed $100.
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