Jensen Huang Has Been Unloading Nvidia Stock This Year. Should Investors Be Worried?

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›Investors oftentimes view insider selling as a sign that a stock may be in trouble, or perhaps as a hint that insiders don't see more room for it to rise. That can potentially raise red flags for a stock, especially when a CEO is involved.Nvidia (NASDAQ: NVDA) has been a top-performing stock for years, and the company is now the most valuable in the world. But its CEO, Jensen Huang, has been unloading shares of the business recently. This month, he has sold hundreds of thousands of shares, and that won't be the end of the selling. What's behind his moves, and should retail investors also consider cashing out in light of them?Image source: Getty Images.Although Nvidia's CEO has been selling shares this year, there are a couple of reasons investors shouldn't be spooked.The first is that his stock sales are part of a pre-published plan that he made known to the public. In March, Huang submitted a Rule 10b5-1 plan to sell up to 6 million shares. Once such plans are put in motion, they are executed by a designated broker who makes the trades at preset times. That ensures that the sales aren't being influenced by new insider information the executive might have. It's not uncommon for executives to periodically unload some of their shares over time, especially when they hold a lot of stock in a company. And it certainly doesn't mean that they are expecting their stock to struggle.Secondly, even after all of those 6 million shares are sold, Huang will still have a considerable position in the company. He now owns around 858 million shares -- around 3.5% of Nvidia's outstanding shares. He remains its top individual shareholder by far, and only a few institutions hold more of its shares than he does. So while these stock sales may seem significant, in the context of his overall position, they are not drastic by any stretch.Huang's stock sale isn't a reason to be concerned about the business. Demand for Nvidia's artificial intelligence (AI) chips remains strong, and there's little reason to be worried about that growth slowing down just yet. Analysts at Grand View Research project that the AI chipset market will grow at a compound annual rate of 28.9% through the end of the decade, and Nvidia should be a huge beneficiary of that.Terms and Privacy PolicyPrivacy & Cookie SettingsMore InfoS&P 5006,362.90 -7.96 (-0.12%)Dow 3044,461.28 -171.71 (-0.38%)Nasdaq21,129.67 +31.38 (+0.15%)Russell 20002,232.40 -10.57 (-0.47%)VIX15.48 -0.50 (-3.13%)Gold3,327.90 -53.30 (-1.58%)PortfolioSign in to access your portfolioSign inTop gainersWING Wingstop Inc. 368.26 +77.96 (+26.85%)FTAI FTAI Aviation Ltd. 144.46 +30.32 (+26.56%)PIII P3 Health Partners Inc. 7.30 +1.50 (+25.86%)GNRC Generac Holdings Inc. 181.00 +29.68 (+19.61%)TER Teradyne, Inc. 107.65 +17.10 (+18.88%)Top losersNEGG Newegg Commerce, Inc. 44.97 -11.22 (-19.97%)CAR Avis Budget Group, Inc. 172.46 -31.42 (-15.41%)SLGN Silgan Holdings Inc. 47.30 -8.50 (-15.23%)CHKP Check Point Software Technologies Ltd. 186.67 -31.66 (-14.50%)ENTG Entegris, Inc. 79.34 -13.41 (-14.46%)Most activeSOFI SoFi Technologies, Inc. 21.87 -0.53 (-2.37%)NVDA NVIDIA Corporation 179.27 +3.76 (+2.14%)LCID Lucid Group, Inc. 2.5000 -0.0600 (-2.34%)TSLA Tesla, Inc. 319.04 -2.16 (-0.67%)F Ford Motor Company 10.87 -0.21 (-1.90%)Earnings eventsTrending tickersMSFT Microsoft Corporation 513.24 +0.67 (+0.13%)META Meta Platforms, Inc. 695.21 -4.79 (-0.68%)QCOM QUALCOMM Incorporated 159.06 -3.02 (-1.86%)AMZN Amazon.com, Inc. 230.19 -0.82 (-0.35%)HOOD Robinhood Markets, Inc. 106.10 +2.78 (+2.69%)Top economic events