The Bottom Line:
- Nancy Pelosi has added 10,000 more shares of Nvidia, totaling 20,000 shares purchased in the last four weeks.
- Pelosi has also sold around 5,000 shares of Microsoft, following the company’s recent earnings report that missed cloud growth expectations.
- Wall Street maintains a strong buy rating on both Nvidia and Microsoft, with price targets indicating potential upside.
- Nvidia’s insider ownership and selling activity are analyzed, providing transparency on the company’s leadership actions.
- The article presents intrinsic value calculations for Nvidia and Microsoft, highlighting potential investment opportunities based on margin of safety principles.
Pelosi Adds 10,000 More Nvidia Shares
Pelosi’s Latest Nvidia Purchase
In a recent development, Nancy Pelosi has added another 10,000 shares of Nvidia to her portfolio. The purchase, made on July 26th, was disclosed just yesterday. With this acquisition, Pelosi now holds a significant stake in the company, having bought the shares at a price of around $125. Despite the recent purchase being up 1.28%, her earlier tranche of 10,000 shares, bought at the end of June, is currently down by approximately 18%.
Pelosi’s Portfolio Adjustments
Pelosi’s investment moves extend beyond Nvidia. Over the past few weeks, she has made several notable sales in her portfolio. These include selling 2,000 shares of Visa and 2,500 shares of Tesla on June 24th. Interestingly, since Pelosi sold her Tesla shares, the stock has risen by around 22%. Most recently, on July 26th, the same day as her Nvidia purchase, Pelosi sold 5,000 shares of Microsoft. This sale came just before Microsoft reported earnings that missed cloud expectations, causing the stock to dip by 2%.
Nvidia and Microsoft: Market Outlook
Despite the recent insider selling, both Nvidia and Microsoft receive strong buy ratings from Wall Street analysts. Nvidia, in particular, has seen significant insider selling over the past year, amounting to around $782 million. However, this is not necessarily a bearish signal, as insider selling can occur for various personal and financial reasons. Microsoft, on the other hand, has a smaller insider ownership of 0.03% and has seen insider selling of $89 million, although no significant insider movements have been reported in the most recent quarter.
Pelosi Sells Microsoft Shares After Earnings Miss
Pelosi’s Latest Nvidia Purchase
In a recent development, Nancy Pelosi has added another 10,000 shares of Nvidia to her portfolio. The purchase, made on July 26th, was disclosed just yesterday. With this acquisition, Pelosi now holds a significant stake in the company, having bought the shares at a price of around $125. Despite the recent purchase being up 1.28%, her earlier tranche of 10,000 shares, bought at the end of June, is currently down by approximately 18%.
Pelosi’s Portfolio Adjustments
Pelosi’s investment moves extend beyond Nvidia. Over the past few weeks, she has made several notable sales in her portfolio. These include selling 2,000 shares of Visa and 2,500 shares of Tesla on June 24th. Interestingly, since Pelosi sold her Tesla shares, the stock has risen by around 22%. Most recently, on July 26th, the same day as her Nvidia purchase, Pelosi sold 5,000 shares of Microsoft. This sale came just before Microsoft reported earnings that missed cloud expectations, causing the stock to dip by 2%.
Market Outlook for Nvidia and Microsoft
Despite the recent insider selling, both Nvidia and Microsoft receive strong buy ratings from Wall Street analysts. Nvidia, in particular, has seen significant insider selling over the past year, amounting to around $782 million. However, this is not necessarily a bearish signal, as insider selling can occur for various personal and financial reasons. Microsoft, on the other hand, has a smaller insider ownership of 0.03% and has seen insider selling of $89 million, although no significant insider movements have been reported in the most recent quarter.
Wall Street’s Strong Buy Ratings on Nvidia and Microsoft
Pelosi’s Recent Investment Moves
Nancy Pelosi has been actively managing her portfolio, with her latest move being the addition of 10,000 Nvidia shares on July 26th. This purchase, disclosed just yesterday, brings her total Nvidia stake to a significant level. Despite the recent acquisition being up 1.28%, her earlier tranche of 10,000 shares, bought at the end of June, is currently down by approximately 18%. Pelosi’s investment decisions extend beyond Nvidia, as she has also made notable sales in her portfolio over the past few weeks, including selling shares of Visa, Tesla, and most recently, Microsoft.
Wall Street’s Perspective on Nvidia and Microsoft
Wall Street analysts maintain strong buy ratings for both Nvidia and Microsoft, despite the recent insider selling activity. Nvidia has seen significant insider selling over the past year, amounting to around $782 million. However, this is not necessarily a bearish signal, as insider selling can occur for various personal and financial reasons. Microsoft, with a smaller insider ownership of 0.03%, has also experienced insider selling of $89 million, although no significant insider movements have been reported in the most recent quarter.
Microsoft’s Earnings and Market Reaction
Pelosi’s sale of 5,000 Microsoft shares on July 26th came just before the company reported earnings that missed cloud expectations. This caused Microsoft’s stock to dip by 2% in the post-market trading session. Despite the disappointing cloud performance, Microsoft’s overall earnings per share and revenue beat market expectations, with the company reporting a double beat on both metrics. The strong bottom-line net income also showed growth compared to the same quarter last year. However, the market’s focus on the cloud segment overshadowed the otherwise positive financial results.
Nvidia’s Insider Ownership and Selling Activity
Nvidia’s Insider Ownership and Recent Selling Activity
Nvidia, a company that has been a strong performer in the stock market, with gains of over 24,000% in the past decade, has seen significant insider selling activity in recent times. The company’s insider ownership currently sits at around 4%, and over the past year, insiders have sold approximately $782 million worth of shares. This selling activity has been consistent on a quarter-on-quarter basis, with the CEO, Jensen Huang, being one of the prominent sellers. Huang has sold multiple tranches of 120,000 shares, with the most recent sale occurring just yesterday, on July 30th, for around $12.8 million.
Microsoft’s Insider Ownership and Selling Trends
Microsoft, another tech giant, has a lower insider ownership compared to Nvidia, at 0.03%. The company has also experienced insider selling, amounting to $89 million, although the most recent quarter has not seen any significant insider movements. The last notable insider sales occurred in the second quarter of 2024, with the CMO selling shares twice on May 31st and June 3rd, totaling around 240,000 shares. Additionally, the EVP sold 25,000 shares on May 23rd for just under $1 million.
Interpreting Insider Selling and Its Impact on Stock Valuations
While insider selling can sometimes be viewed as a bearish signal, it is important to note that insiders may sell shares for various personal or financial reasons, and it does not necessarily indicate a lack of confidence in the company’s prospects. Both Nvidia and Microsoft continue to receive strong buy ratings from Wall Street analysts, despite the recent insider selling activity. Investors should consider a range of factors, including the company’s financial performance, growth prospects, and overall market conditions, when making investment decisions, rather than solely focusing on insider trading patterns.
Intrinsic Value Calculations for Nvidia and Microsoft
Discounted Cash Flow Analysis for Nvidia
To determine the intrinsic value of Nvidia, a discounted cash flow (DCF) model was employed. The model considers the company’s free cash flow year-on-year, with an average growth rate of approximately 94%. Looking forward, a medium growth rate of 30% was applied, which is lower than the more recent year’s growth and the average growth of 94%. This 30% growth rate was used in conjunction with the discount rate to calculate the present value of future free cash flow and terminal value. By adding these values together, subtracting total debt, and dividing by the number of shares outstanding, an intrinsic value of $140 per share was derived, indicating a potential upside of 22% from the current trading price.
Microsoft’s Intrinsic Value Calculation
Microsoft’s intrinsic value was determined to be $429 per share, based on the average of three valuation models. The current market price sits at $418, suggesting that the stock is trading near its intrinsic value. Applying a margin of safety of 10%, Microsoft would be considered a buy at around $386 per share. However, at the time of this analysis, the stock does not meet the 10% margin of safety threshold. It is worth noting that during the pre-market or after-hours trading, when Microsoft’s stock price was down by approximately 8%, there may have been an opportunity to buy shares at the desired margin of safety level.
Margin of Safety Considerations
For Nvidia, a margin of safety of 10% is initially considered and applied if the stock meets three golden criteria: a wide moat, strong financial metrics, and good forward-looking data. If these criteria are met, the margin of safety is increased until it is near the current trading price. In the case of Nvidia, after the recent run-up, a 20% margin of safety would be around the $112 mark. However, the stock currently sits between a 15% to 20% margin of safety. Investors who believe this margin of safety is warranted may consider adding Nvidia to their portfolios, following in the footsteps of Nancy Pelosi, who has been accumulating Nvidia shares over the past few years.
