TSLA
Tesla
-- 231.274 NVDA
NVIDIA
-- 109.690 PLTR
Palantir
-- 79.750 AAPL
Apple
-- 221.140 AMD
Advanced Micro Devices
-- 96.780 
Is It Time to Sell the Skyrocketing Tech Stocks? Top Executives of US Tech Giants Trim Their Stock Holdings Amid Market Swings
On Monday, the $Nasdaq Composite Index (.IXIC.US)$ dropped by 0.8% as various tech companies experienced decline including $NVIDIA (NVDA.US)$ and $Meta Platforms (META.US)$ which decreased by 2.7% and 1.5%, respectively. The $S&P 500 Index (.SPX.US)$ and the $Dow Jones Industrial Average (.DJI.US)$ also saw a decline amid recent hawkish commentary from the central bank.
Additionally, according to the Washington Service, Nvidia's executives and directors sold or filed paperwork to sell approximately 370,000 shares worth about $180 million last month. This could potentially be the largest monthly sale in at least six years if all the shares were sold.
Following a 200% increase in value throughout 2023, Nvidia shares have slowed down and fallen by nearly 10% since November 21st. This drop came after the company released a revenue forecast for the current quarter, which exceeded the average analyst estimate by around $2 billion due to strong demand for artificial intelligence computing chips. But executives warned of a "significant" slowdown in China sales.
Nvidia insider transactions have raised concerns among investors as the insiders haven't made any purchases since 2020, which might not inspire confidence in future rallies for the company. Nevertheless, most of the sales follow preset plans, and a representative for Nvidia has said that the majority of these sales are based on 10b5-1 plans. The chief executive of Banrion Capital Management, which holds Nvidia shares, acknowledged that it makes sense for insiders to monetize some of their compensation given the current stock price.
What is more, according to the latest regulatory filings, Meta CEO Mark Zuckerberg sold almost $185 million worth of shares in November, marking his first share sale since November 2021.
Meta's stock has surged by 165% this year, outperforming all major US tech companies except for Nvidia. This surge is helping to maximize the proceeds for Mark Zuckerberg's other activities outside Meta, such as venture capital, scientific research, and impact investments. Although Zuckerberg has sold blocks of Meta stock regularly over the past decade, he did not sell a single share in 2022 when the company had a catastrophic quarterly performance that led to one of the biggest one-day stock wipeouts and its worst annual performance since its 2012 IPO.
What Analysts Say
• Jason Heller, senior executive vice president at Coastal Wealth, suggests that investors should temper their expectations for equity gains heading into 2024.
We believe there are few upward catalysts for stocks given elevated interest rates, a weakening consumer and tempered earnings expectations," said Heller. "We expect stocks to remain in a narrow trading range."
• The stock market is following the same playbook it did 17 years ago – and investors hoping that Fed rate cuts will lead to another monster rally in stocks may be slightly disappointed, according to $Morgan Stanley (MS.US)$'s investment chief Mike Wilson.
Wilson has been one of the most bearish forecasters on Wall Street this year, and has repeatedly warned that the gains in stocks are part of a bear market rally. Despite the strong bounce-back in stocks, with the S&P 500 up by 19% this year, investors may be getting their hopes up as markets anticipate rate cuts from the Federal Reserve. However, such rate cuts during the late stage of the business cycle could result in smaller-than-expected returns for stocks. This dynamic has previously been observed in 2006 and 2018 when late-cycle interest rate cuts led to only about a 14% return in stocks over the next 12 months.
• $Goldman Sachs (GS.US)$ expects the S&P 500 index to reach 4700 by the end of 2024, indicating a 6% gain including dividends.
The estimate, from a research note led by chief equity strategist David Kostin, is based on modest economic expansion, an increase in earnings of 5% and a valuation multiple of 18. It is anticipated that the market will be stable in the first half of the year and returns will be more concentrated in the second half after the Federal Reserve begins to cut interest rates and the overhang of the US election dissipates.
• Vincent Reinhart, Dreyfus & Mellon chief economist and a former top Fed monetary policy official, warns that markets have been too quick to price in lower interest rates.
They will have a real awkward time in December, with the projections likely showing interest rate hikes at an end, but Fed officials not wanting that to be construed as a weakening of their commitment to 2% inflation or as a signal that cuts are imminent"
• $Stifel Financial (SF.US)$ Chief Equity Strategist Barry Bannister and his team sees the S&P 500 "topping" around 4,650 into mid-2024.
Expectations the Fed is done hiking rates and will instead turn to rate cuts early next year have helped drive a rally in stocks in recent weeks. But the Stifel strategists said in their outlook note that they do not see the Fed cutting in the first half of 2024, pointing to economic growth and inflation proving resilient.
This rotation for the (cap-weighted) S&P 500 causes the index to struggle to rise much above 4,650 into mid-2024," the Stifel strategists said in their note.
Source: Bloomberg, ZeroHedge, TheStreet, Seeking Alpha
Disclaimer: Moomoo Technologies Inc. is providing this content for information and educational use only.
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