Nvidia CEO Done Selling Shares. What's Next for Nvidia?

On September 12, Nvidia CEO Jensen Huang has done his planned sale of 6 million shares ahead of schedule, according to a new filing. He was expected to complete selling shares by the end of Q1 2025, but he finished in just three months, from June 13 to September 12, cashing out over $700 million within 50 trading days.

Huang carried out this round of stock sales through a 10b5-1 rule. Between June 14 and September 13, the size of each sale varied from as few as 70 shares to as many as 75,300 shares. Sale prices ranged from a low of $91.72 to a high of $140.24, with an average cost per share of $118.83, for a total of $713 million.

According to documents filed with the SEC, Huang now owns 75.4 million Nvidia shares in his personal account, in addition to 786 million shares held through trusts and partnerships. The early completion of these stock sales eased concerns about insider selling, boosting investor confidence and contributing to a 3.97% increase in Nvidia's stock price on Tuesday.

Nvidia's stock price benefited from this news. As of Tuesday's close, Nvidia shares rose 3.97%. Concerns about the demand outlook for its chips and Huang's ongoing stock sales had weighed on the stock price, which had been volatile for nearly three months. However, this development stabilized investor sentiment.

At the Dreamforce conference, Huang recently noted that AI is evolving from a tool into a skills-based industry, presenting significant opportunities. He emphasized that Nvidia's growth is far from over. According to Statista, the AI industry is projected to grow from $184 billion in 2023 to $826 billion by 2030, further solidifying Nvidia's leadership position given its significant role in the market.

Moreover, Nvidia's dominance in the GPU market provides continued profit assurance for the future. Wall Street anticipates that the upcoming Blackwell chip will contribute significantly to its growth, especially as major companies like Meta, Google, and Microsoft increase their demand for these new chips. Morgan Stanley estimates that the Blackwell B200 chip will have higher AI throughput than the existing Hopper H100 chip, and Nvidia has already entered mass production. It is expected to ship 450,000 Blackwell chips in Q4, potentially generating $10 billion in revenue.

Bernstein SocGen analyst Stacy Rasgon indicated that Nvidia's data center revenues are expected to grow substantially in Q4. The current market consensus forecasts a $3.8 billion quarter-over-quarter increase in Nvidia's data center revenues.

At the same time, Nvidia has a strong position in the GPU market, with more developers relying on its CUDA platform over AMD's alternative platform, ROCm. This technical advantage ensures Nvidia's ongoing success. Industry forecasts suggest the GPU market will grow from $75.77 billion today to $1.41 trillion over the next decade.

However, despite this optimism, some analysts are cautious about Nvidia's future growth. The company relies on a few large clients for 95% of its revenue. If competitors develop new hardware, Nvidia's high pricing strategy may be pressured, affecting its market share and profitability.

Vivek Arya, Bank of America Securities stock analyst, also pointed out short-term risks, including pressure on profit margins, regulatory scrutiny, and competition. But still, he believes Nvidia's stock price could recover, especially with new products expected to drive growth.

In addition, investors are watching the impact of recent interest rate cuts on Nvidia. Historical data shows that Nvidia's stock price typically rises by 16.6% in the three months following a rate cut, 16.7% in six months, and 20.7% over 12 months, compared to a 2.9% increase in the S&P 500 during the same periods. While the current economic environment mirrors 2019, trade tensions and macroeconomic risks could still affect the market.

For now, the stock price is approaching the apex of a triangle, around $118. This level has seen several periods of consolidation and is a key level of contention between bulls and bears. Bulls might look for an entry point if the price breaks above this level, while bears could target the $103.70 range if the price breaks downward, with potential further retracement toward the $92 level seen in an earlier rebound.