Jensen Huang, the CEO of Nvidia, has been selling shares of his company’s stock nearly every trading day since mid-June. He has been doing this through a Rule 10b5-1 plan, which allows company insiders to sell shares without being accused of insider trading. Huang’s current plan was set up in March.
He arranged to sell 6 million shares by the end of March 2025. Each trading day, he sells 120,000 Nvidia shares. His plan began on June 13, and it seems his trading is almost done.
Through these sales, Huang will have taken in over $700 million in cash. But this is less than 1% of the shares he owns, as he still holds over 860 million shares of Nvidia. The choice to sell Nvidia shares depends on each person’s situation.
If you’ve had big gains over the past few years and Nvidia has become a large part of your portfolio, it might be smart to lock in some gains as part of careful portfolio risk management. Every investment has risk, and Nvidia is no different. The company’s biggest risk is future demand.
There are questions about whether the demand for Nvidia’s products will peak and then go down as the race for infrastructure slows.
Huang’s strategic share selling
A lot depends on how other companies gain from AI in software and other industries.
Right now, AI infrastructure spending shows no sign of slowing down. Cloud-computing operators are raising their capital spending budgets. Companies like Meta Platforms suggest there’s more risk in under-investing in AI infrastructure and falling behind than in over-investing.
As AI models get better, they need a lot more computing power, which is provided by Nvidia’s GPUs. For example, xAI’s Grok large language model went from using 20,000 GPUs for its second version to needing 100,000 for its third version. Alphabet’s Llama 4 is expected to need ten times as many GPUs as Llama 3.
Oracle CEO Larry Ellison recently said that there is no end in sight for the need for computing power for AI training. While there’s a risk that future demand could eventually dry up, comments from Nvidia’s customers show that this isn’t a worry in the near term. Nvidia is still the best-positioned company in the AI infrastructure buildout.
The stock is attractively priced at a forward price-to-earnings ratio of about 29x next year’s analyst estimates, given the strong growth still ahead based on customers’ comments. So, Huang’s recent selling does not worry me, and I would even think about buying more Nvidia stock. As always, each person’s investment choices should be based on their financial situation and investment goals.
