Semiconductor executives took the opportunity of their companies’ share outperformance this year to sell $1.35 billion worth of company stock during the third quarter, according to data from the Washington Service, which tracks insider transactions. That’s the highest quarterly value sold by employees and directors of companies in the semiconductor industry, the Washington Service said, and includes pre-planned sales. Chip insiders have stepped up their sales of company stock this year as AI-driven demand for processing power has propelled the sector’s outperformance. Nvidia (NVDA) is the second-best performing stock in the S & P 500 so far in 2024, up more than 137% since December 2023. The VanEck Semiconductor ETF (SMH) which tracks a basket of chip stocks, is up 38% YTD while the SPDR S & P 500 ETF (SPY) is up 19% over the same period. SMH .SPX YTD mountain VanEck Semiconductors ETF vs. S & P 500, YTD Nvidia CEO Jensen Huang has led the stock sales this year, unloading more than $700 million in Nvidia shares during the second and third quarters of 2024, fulfilling a trading plan adopted in March. A recent regulatory filing indicated that Huang had completed the planned sales. Huang remains Nvidia’s largest individual shareholder with around 3.5% of company shares outstanding, according to data from FactSet. Companies will often say that preplanned sales under rule 10b5-1 should not be considered the same as open market sells and buys because these plans are often used for financial planning purposes, etc. Still, these plans can be changed with the amounts sold accelerated or slowed down. And when overall numbers for a particular stock or sector reach extremes like this, it still raises red flags among experts regardless. Nvidia board member and venture capitalist Tench Coxe too sold 2 million shares in late September for a total around $235.7 million. Coxe had held the shares since acquiring them in a private placement in 1997, according to a securities filing. He had sold some $170 million in company shares back in March . In all, NVDA insiders disclosed around $960 million in stock sales during the third quarter, according to data collected by VerityData. Selling beyond Nvidia While Nvidia has recently dominated semiconductor insider sales, other executives have also been selling shares. Broadcom (AVGO) CEO Hock Tan sold some 275,000 shares in three transactions between July and September for a total of $46.9 million. Tan still controls some 1.3 million shares. Verity flagged a cluster of AVGO sales towards the end of September with Tan as well as a director and a company officer selling shares. AVGO YTD mountain Broadcom, YTD Six insiders from KLA Corp (KLAC) disclosed selling shares during the quarter, totaling around $29.9 million in value, according to Verity. CEO Richard Wallace and CFO Bren Higgins accounted for around $16 million of that total. Those trades were conducted under 10b5-1 trading plans. Insiders at Texas Instruments (TXN) sold nearly $18 million worth of shares during the third quarter, most from exercising options, per Verity. Overall, 177 chip company insiders sold stock in the third quarter, down from a recent high of 245 in Q2 of 2024, according to the Washington Service. They sold a collective 12.7 million shares in Q3, a slight increase from Q2 but just below the 13.6 million shares sold in Q1. This data is based on a universe of companies required to file insider transaction documents with the SEC and includes shares sold under 10b5-1 trading plans and includes filings through 9/25/24.
