Dec 05, 2023

Nvidia shareholders have been seen ditching stock, which is a worrying sign for the company. 


NVDA – Daily Chart

NVDA trades at $454 but has support below the gap in May. 

Nvidia reported ‘blowout’ third-quarter earnings recently. However, one of the reasons for that was the trade war between the US and China. Companies like Baidu made billions in chip purchases before chip trade was slowed among the world’s largest economies. 

The artificial intelligence surge created a 349% rally in Nvidia shares from $112 per share in October 2022 to over $500 by mid-November. The stock dipped again this week as executives were seen selling stock. 

Nvidia shares are now down 10% from a recent peak, and investors are concerned about the current stock sales. 

Deutsche Bank was one investment bank saying that AI may not be the golden goose that investors expect. 

An analyst at the bank said AI interest was fading and would only benefit private markets. “Beyond a handful of stocks, there have been few clear winners or losers from the buzz around generative AI.” The major non-semiconductor players are still figuring out the product, and some risks must be addressed. For other technologies, including machine learning, frequently touted for their applications in areas such as medicine and cybersecurity, the reality is that few emerged overnight and have been evolving for years. 

Recent data from Washington Service said that insiders in November sold or filed paperwork to sell 370,000 shares worth around $180 million, the largest in dollar terms in at least six years.  

Nvidia has been the market leader in AI, and if the stock suffers, then the market will suffer. The belief that the world was set to embrace AI may need to be grounded in actual data. Corporations have been testing the new technology, but there has yet to be a confirmed adoption.

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