Insiders are dumping these 10 stocks

They are all AI shares, that is, shares of companies that have decided to bet on the Artificial Intelligence business: and they are all shares, 10 in total, that the insiders have decided to unload, in a crucial phase for Wall Street characterized by the quarterly earnings season.

Some of these stocks continue to receive the blessing of analysts in any case, who foresee margins of even rather significant increases.

Moreover, various reasons can push the CEO or other managers of a listed company to sell off part of the stake held in it: and not all sales necessarily correspond to a demonstration of distrust.

Among the 10 stocks that are crowding with insider sells are well-known names in Corporate America; other companies are less known: all are carefully monitored by the investing public, for the high growth potential that characterizes them.

Microsoft

Microsoft (NASDAQ:MSFT) is the US Big Tech considered among the “Winner” stocks of the bet on artificial intelligence.

On September 9, 2024, the vice president of the giant Bradford L. Smith sold 40,000 Microsoft shares at a price of $402.59 per share, for a value of $16.1 million, cutting his stake by 7%, to 532,347 shares.

Keep an eye on the American giant’s stock, as well as its growth potential in the AI business:

After a year of margin expansion, the giant now expects a decline in operating margins, due to increased capital expenditure for data centers, expected to impact revenues by up to 21%, from the previous 12%.

This is a much higher incidence than that of the expenses of Amazon and Google, which is explained by Microsoft’s high dependence on Nvidia chips. This is why Gil Luria, analyst at DA Davidson, warned that if Microsoft continues to invest so heavily, margins could fall by at least 1 percentage point, putting the giant’s workforce at risk. Result: Microsoft could be forced to lay off about 10,000 people every year to maintain its margins.

There is also the worm of competition, which is becoming more heated: Luria also recalled that, in terms of cloud growth, Amazon Web Services is about to catch up with Microsoft’s Azure, and that Google Cloud is also making quite a few steps forward.

The analyst thus announced a downgrade on Microsoft stock from “Buy” to “Neutral”, reiterating the target price at $475.

Meta

Meta Platforms (NASDAQ:META) is the other big name hit by insider selling. On September 19, 2024, the head of the product division Christopher K. Cox sold 20,000 shares of the Big Tech that controls Facebook, Instagram, WhatsApp, for $557.52 per share, or a total of $11.15 million, reducing his stake by 5%, to 393,708 shares.

Investors are looking with interest at Meta’s ambitions in the AI sector, believing that, with a net cash flow of $35 billion and a solid user base, the group’s shares have all the credentials to confirm themselves as a solid long-term investment.

As for the giant’s goals in the world of artificial intelligence, it should be remembered that Meta intends to use AI to improve engagement and language models similar to Llma 3, to make the interaction between users more efficient, strengthen engagement itself, and better monetize its 3.2 billion daily active users.

Nvidia

NVIDIA (NASDAQ:NVDA), ergo the undisputed queen of the great bet launched by Wall Street on AI, or the US Big Tech identified as the undisputed winner of the artificial intelligence market, thanks to its semiconductors that continue to be the subject of feverish requests.

On September 6, 2024, US Big Tech CEO Jen Hsun Huang sold 240,000 NVDA shares at $104.35 per share, for a total value of approximately $25 million. The move did not have a major impact on the size of the stake, which still stands at 861,499,236 shares.

Director Mark A. Stevens also subsequently sold Nvidia shares, selling 165,100 Nvidia shares at $121.27 each on September 24, again without much change to his holding of 38,592,685 shares, in a transaction that was valued at approximately $20 million.

On the same days, there were also divestments by director Tench Coxe, who sold 2 million Nvidia shares at $117.87 per share, for a total amount of $235.7 million, cutting his stake by 5% to 34,578,208 shares.

Analysts, faced with the buying fever that has returned to the giant’s shares, have warned that Nvidia will not remain the AI market leader forever, given the growing competition coming from direct competitor AMD and the development of AI accelerators by giants such as Google, Amazon and even Apple.

Some experts believe, for example, that in the years 2025-2029, Nvidia’s share of the data center market will be worth more than $950 billion, less than half of the overall market value, expected to be $2 trillion: that said, according to the same experts, the US Big Tech will continue to confirm itself among the main players in the AI business.

Broadcom

Broadcom Inc (NASDAQ:AVGO): company that develops a wide range of products for data centers, the networking market, as well as for the software, wireless, and broadband sectors.

On September 24, 2024, CEO Hock E. Tan sold 150,000 shares, at $172.94 per share, for $25.94 million, reducing his stake by 10% to 1,289,440.

Earlier, Broadcom Semiconductor Solutions Group Chief Executive Officer Charlie B. Kawwas unloaded 25,200 shares at $168.27 per share, for $4.24 million, reducing his holding by 3% to 838,470 shares.

Analysts at Columbia Threadneedle’s global technology growth strategy division noted in a commentary that Broadcom has a strong position in the AI market as evidenced by the company’s own reported AI sales, up 400% year-over-year in the second quarter of 2024. “Overall, AI revenue accounted for 30% of total revenue in 2024 and is set to account for the largest share of revenue over the next two to three years,” the note said.

Adobe

Adobe (NASDAQ:ADBE) is a computer software giant that offers a wide range of programs.

On September 25, 2024, Chairman and CEO Shantanu Narayen sold 25,000 shares at $521.58 per share, for about $13 million, cutting his stake by 7% to 357,967 shares.

The stock has since fallen about 5%. Analysts are still unclear about whether the company can ride the wave of AI success.

On the other hand, Adobe also announced that it estimates revenue for the fourth quarter of the year between $5.5 billion and $5.55 billion, an average of $5.525 billion, an amount that is lower than the $5.6 billion forecast by consensus. But the company is launching several tools enhanced with artificial intelligence, in its products, which could strengthen its revenue growth, in the future.

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DELL

Among the historic names in the ranking, Dell is an American multinational created in 2016 from the merger between Dell and EMC Corporation, among the technology companies that occupy a leading position worldwide.

On September 26, CEO Michael S. Dell sold 10 million shares, at $122.40 per share, for $1.224 billion, reducing his stake by 35% to 18,292,241 shares.

Since that move by the CEO, the stock has fallen by 3.8%.

UBS analysts remain optimistic about the stock, noting that the company’s shares are among the most important, in the technology sector, to hold in the portfolio at the end of 2024.

Analysts justify their confidence with the potential that, in their opinion, Dell presents as an emerging player in the AI server market.

Also keep an eye on the positive comment of Bill Baruch, founder of Blue Line Capital who, in a recent interview, spoke of a "significant" improvement in the division that includes AI servers: a division that has seen annual growth of around 80%, with the incidence on total revenue rising from 2.2% just three quarters ago to 12.4%.

The analyst believes that Dell stock could rise to $134 by the end of 2024. Incidentally, in May 2024, Dell equipped the AI factory launched with Nvidia with the new PowerEdge XE9680L server and other solutions.

Palo Alto

Palo Alto Networks Inc (NASDAQ:PANW) is an American multinational cybersecurity company.

On September 3, 2024, Palo Alto Networks CTO Nir Zuk sold 36,000 shares, at $359.17 per share, for $12.93 million, cutting his stake by 2%, to 1,426,481 shares.

The stock is up 4.4% since that move. Palo Alto’s flagship product is Prisma Secure Access Service Edge (SASE). Rudy Kessinger of DA Davidson believes that Palo Alto Networks has so far captured just 7% of a market that could be worth as much as $200 billion.

Arista Networks

Arista Networks Inc (NYSE:ANET), a company that provides networks for large data centers and cloud computing.

On September 6, 2024, the CTO and senior vice president of the group’s software engineering division sold 38,311 shares, for $317.23 per share, reducing his holding by 7% to 548,183 shares. The transaction was valued at approximately $12.15 million.

Watch out for the stock, jumped by the sale of shares by 26%.

AppLovin Corp

AppLovin Corp (NASDAQ:APP), one of the most important mobile marketing or also mobile gaming platforms.

On September 12, 2024, CEO Arash Adam Foroughi sold 200,000 shares at $107.80 per share, for $21.6 million, cutting his stake by 2%, to 9,243,217 shares.

Since that day, AppLovin shares have rallied 35%.

An advertising platform for video games, AppLOvin is considered by Ankur Crawford, vice president of Alger, among the most undervalued AI stocks, with immense growth potential.

Crawford noted, in particular, that AppLovin uses AI to allow the consumer to download more games. “By doing so, the group is able to monetize its stocks better than anyone else”. Crawford also highlighted that the group enjoys “a 70% market share”, and that it is now “also focusing on e-commerce”.

Palantir Technologies

With its artificial intelligence platform (AIP) launched about a year ago, Palantir Technologies (NYSE; ticker PLTR), provides its customers - among whom Airbus, BP, Panasonic stand out - solutions to reduce costs and increase profits.

On September 24, entrepreneur Peter Thiel, known as both a political activist and venture capitalist who co-founded big-name companies that helped create Palantir itself, as well as PayPal and Founders Fund, sold 16,178,415 shares of the company at $36.90 per share, reducing his stake by 16% to 83,283,878 shares. The sale was valued at approximately $597 million.

Since then, Palantir Technologies shares have jumped 17%.

Thiel then sold more Palantir shares on September 27, selling 12,412,322 shares at $36.85 each, further reducing his stake in the company by 15% to 70,871,556 shares. The proceeds, on this second occasion, were equal to $457 million.

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Original article published on Money.it Italy 2024-10-22 16:01:13. Original title: Gli insider stanno scaricando queste 10 azioni