Key Points
-
Investors have seen notable trends in artificial intelligence (AI), with companies like Nvidia and Palantir Technologies at the forefront.
-
Since 2023, Nvidia’s market cap has grown by $4.3 trillion, driven by its dominance in AI-accelerated data centers, while Palantir’s shares have surged nearly 2,200% since late 2022.
-
However, insiders at both companies have sold a combined $12.83 billion in shares since January 2021, indicating potential investor caution.
In the last three years, the AI sector has attracted massive investor capital, prominently benefiting Nvidia and Palantir Technologies. Nvidia, holding a significant market share in AI data center GPUs, has added $4.3 trillion in market value, while Palantir has seen a spectacular rise of approximately 2,200% in its share price. But insider selling totals around $5.66 billion for Nvidia and $7.17 billion for Palantir point to growing concerns among those closest to the companies.
This substantial insider selling, totaling $12.83 billion, raises alarms about the sustainability of these companies’ remarkable growth trajectories. As of November 2022, Nvidia’s price-to-sales ratio topped 30 and Palantir’s reached nearly 100, suggesting potential overvaluation. With no significant insider buying recorded in recent years, this trend underscores a cautionary stance on the future of their stock prices.
