Shares of the technology companies roared back swiftly in the first half of 2023, providing stakeholders with an opportunity to capitalize on the gains. Taking advantage of this price growth, corporate insiders sold shares of (NASDAQ:NVDA), Salesforce’s (NYSE:CRM), and Palo Alto Networks (NASDAQ:PANW), according to our Insiders Trading Activity tool. Given the selloff, the insider trading trends remain negative for these stocks.
However, it is important to highlight here that corporate insiders selling stocks are not necessarily a bad sign. Keeping track of insiders’ activities helps investors make sound investment decisions, especially if these trades are informative. TipRanks scans SEC filings to determine whether insider trades are informative or uninformative, and we display that data on our Insider Trading pages. Informative Buy or Sell transactions indicate insiders’ sentiment and possess a higher predictive ability.
With this background, let’s dig deeper to see the recent insider transactions on NVDA, CRM, and PANW stocks.
What is the Forecast for Nvidia Stock?
Thanks to Nvidia’s leadership in the AI (Artificial Intelligence) space, the chip company is undoubtedly a solid long-term bet. Yet the insiders sold the shares due to the company's impressive performance (up 218% year-to-date).
According to TipRanks’ Insider Trading Activity Tool, the insider confidence signal is "Very Negative" for NVDA stock. In June 2023, 13 insiders, including two of its directors, Tench Coxe and Mark A. Stevens, executed 16 Sell transactions in NVDA stock. Overall, insiders sold NVDA shares worth $191.6 million in the last three months.
Moreover, the Insider Trading Activity trend has remained negative in the last six months, with the stock witnessing 13 Informative Sell transactions. (See the image below).
While NVDA stock has a negative signal from insiders, it commands a Strong Buy consensus rating on TipRanks, reflecting 30 Buy, two Hold, and one Sell recommendations. However, analysts’ average price target of $484.30 implies a limited upside potential of 4.24%.
Interestingly, TipRanks offers daily insider transactions as well as a list of the top corporate insiders. It also provides a list of hot stocks that boast either a Very Positive or Positive insider confidence signal.
What is the Prediction for Salesforce Stock?
Salesforce’s ability to effectively drive revenues and defend its margins bodes well for future growth. Further, benefits from the ongoing digital shift are positive. Given the favorable backdrop, shares of this cloud-based software company have risen by about 72% on a year-to-date basis.
Thanks to this appreciation in price, insiders sold CRM stock in the past quarter. Per our Insider Trading Activity Tool, the insider confidence signal for CRM stock is "Very Negative." So far in July, four insiders have executed 13 Sell transactions in CRM stock. Further, insiders, including its CEO Marc Benioff, sold CRM shares worth $136.6 million in the last three months.
Moreover, the Insider Trading Activity trend has remained negative in the last six months, with the stock witnessing four Informative Sell transactions.
Salesforce stock has a Moderate Buy consensus rating on TipRanks based on 22 Buys, 10 Holds, and one Sell recommendation. Further, these analysts’ average price target of $236.63 implies 3.79% upside potential from current levels.
What is the Future of Palo Alto Stock?
Shares of the cybersecurity company Palo Alto Networks are up over 79% despite a weak macro environment that has made enterprises more cautious in their spending. While PANW stock is poised to benefit from the ongoing shift to the cloud and digital transformation, insiders have consistently sold its stock in the first half of 2023.
According to TipRanks’ Insider Trading Activity Tool, the insider confidence signal is "Negative" for PANW stock. In June 2023, three insiders executed three Sell transactions in NVDA stock. Insiders, including its CEO Nikesh Arora, sold PANW shares worth $121 million in the last three months.
Moreover, insider trading trends show that PANW stock witnessed six Informative Sell transactions in the past six months.
Nonetheless, PANW stock sports a Strong Buy consensus rating on TipRanks, reflecting 29 Buy and two Hold recommendations. Analysts’ average price target of $257.59 suggests a mere 3.02% upside potential from current levels.
Bottom Line
The recent rally in share prices of these companies has driven the valuations higher, limiting the upside potential in the near term. The possibility of these stocks experiencing a correction remains a wait-and-see story. However, the bearish signal from insiders' Informative Sell transactions, significant price appreciation, and expensive valuation suggest that retail investors must take caution before investing in these shares near the current price levels.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
