Last Friday, the US stock market hit the 'Triple Witching Day'. The options with a market value of nearly 5.5 trillion US dollars on Wall Street and the large-scale ETF adjustments caused by the end-of-quarter index adjustment caused violent market volatility. Faced with such a huge impact, the performance of large technology stocks has been a concern. Nvidia, the 'AI head', fell by about 5% at one point during the day, and then the decline narrowed slightly. It finally closed down 3.22% at the latest price of $126.57 with a market capitalization of $3.11 trillion.

After the US stock opened on Monday, the stock price of Nvidia continued to decline. As of the close, Nvidia fell another 6.68%, accumulating nearly 13% in the past three days, and is now reported at $118.11.

It is worth noting that on June 18, Nvidia beat Microsoft and Apple to become the world's largest market capitalization. However, after two consecutive days of decline on June 20 and 21, Nvidia fell by nearly 7%, and its market value has evaporated more than 220 billion US dollars (approximately RMB 1.6 trillion), once again falling to the third largest market capitalization in the world. Currently, Microsoft has a market value of $3.34 trillion, Apple has $3.18 trillion, and Nvidia has $3.11 trillion.

Frequently suffered from executive share sales, Nvidia lost the top spot in global market capitalization.

In addition to the violent impact of the 'Triple Witching Day' and some fund profit-taking, Nvidia, which is in a high position, is also facing the challenge of executive share sales.

According to SEC documents, on June 21, local time, Huang Renxun sold 120,000 shares of Nvidia again. Together with this sale, Huang Renxun has reduced his Nvidia holdings by 720,000 shares since June 13, with a total cash-out amount of nearly 95 million US dollars (approximately RMB 690 million).

At the same time, Nvidia executives are also frequently reducing their holdings and cashing out. The documents showed that in addition to Huang Renxun, Nvidia CFO Colette Kress sold $12.7 million worth of stocks. Prior to this, Nvidia Executive Vice President Deborah Shoquist also sold 41,140 shares of stocks on June 3, cashing out more than US$45 million. Other Nvidia executives who have reduced their holdings and cashed out in recent weeks include Dawn Hudson, Tench Coxe, John Dabiri, Michael McCaffery, Brooke Seawell, and Mark Stevens, who have sold different numbers of Nvidia stocks.

According to data compiled by Washington Service, excluding the impact of the 1-for-10 stock split on June 10, Nvidia executives and directors have sold more than 770,000 shares of Nvidia stock so far, cashing out more than 700 million US dollars (approximately RMB 5.1 billion). Since Nvidia's first-quarter financial report was released on May 22, more than one-third of insiders have been selling stocks, and the rate of selling has reached the highest level in years.

However, investors must note that Huang Renxun's share sales are traceable. At the end of March this year, Nvidia released a detailed quarterly financial report (10-Q form), mentioning that Huang Renxun set up a 10b5-1 stock sales plan on March 14 this year, and will sell up to 600,000 Nvidia shares before the end of March 2025.

Some market views point out that the stocks sold by Huang Renxun are part of his executive compensation plan, which includes restricted stock units (RSU) and performance stock units (PSU). When allowed, the company CEO often sells such stocks. However, it should also be reminded that when the stock sales plan was set up, Nvidia had not yet split its stock. On June 10, Nvidia split its stock as scheduled. Huang Renxun's cash-out behavior since June 13 may continue for a longer period of time.

In addition, data shows that this round of sales accounts for only a very small part of Huang Renxun's holdings. As of March 25 this year, Huang Renxun held nearly 93.5 million shares of Nvidia stock, accounting for almost 3.8% of the company's outstanding shares.

Can the 'crazy rise' of large technology stocks continue?

The trading congestion of the current US stock market has reached the highest level since this round of bull market. Whether the rise of large technology stocks led by Nvidia can continue has always been the focus of Wall Street debate.

Nvidia's long camp is powerful and not afraid of short-term stock price fluctuations. It still bullish on the future trend of Nvidia and frequently raises its target price forecast.

Bank of America has recently reiterated its buy rating for Nvidia, with a target price of $150 and a preferred position, which means that there is about 18% upside potential for the stock in the next 12 months. The bank said, 'Nvidia's sharp rise makes it vulnerable to profit-taking, but we believe any fluctuations may be short-lived.'

Bank of America emphasizes in the report that the hardware deployment cycle for generative AI (GenAI) may be as long as 3-5 years, but it is currently only in its second year. It is expected that Nvidia has an opportunity to utilize as much as $300 billion annually, which is about three times the company's expected revenue for this year. Bank of America also expects Nvidia's next-generation AI GPU based on the Blackwell architecture to bring huge revenue contributions.

And Bank of America refutes the 'AI bubble argument' derived from the 'Internet bubble period' in 2000, emphasizing that unlike the 'Internet boom period', which relied on high-risk debt financing, the deployment of generative AI is a competition among technology industry leaders, including some of the most financially powerful cloud computing giants with strong fundamentals.

Hans Mosesmann, a chip industry analyst at investment firm Rosenblatt, has raised Nvidia's target stock price from $140 to an amazing $200 per share within 12 months. This means that Nvidia's total market value may reach $5 trillion, which is currently the highest price given by Wall Street institutions.

Looking to the future, Mosesmann said that Nvidia's true source of strong profit comes not only from its AI GPU products focused on AI hardware infrastructure, but also from Nvidia's software business, which is led by Nvidia's popular CUDA software and hardware co-ordination platform. That is, 'CUDA+AI GPU' together form Nvidia's incredibly strong moat.

In addition, Ben Reitzes, an analyst at Wall Street consultancy Melius Research, has raised his target for Nvidia's stock price to $160 from $125 in a recent report. This is their fifth upward revision this year.

However, as Nvidia's stock price continues to soar, the short camp is also gradually expanding. As a Wall Street institution with the most pessimistic rating for Nvidia's stock price, D.A. Davidson's analyst Gil Luria only rates Nvidia as 'neutral' with a target price of only $90. Gil said he doubted Nvidia's core customer base, such as Amazon AWS and other computing giants, will continue to spend enough money sustainably to drive Wall Street's strong growth expectations for the company's performance.

Chief market strategist Michael O'Rourke of Jonestrading is also worried about whether Nvidia, with its huge market capitalization, can continue to bring unexpected performance results. He said, 'An even bigger concern is that the extent to which Nvidia exceeded Wall Street's growth expectations will inevitably begin to weaken someday, due to the increasingly large scale of the company, which may make it even more difficult to justify the continued upward trend of the stock price.'

In addition, Zhu Xiaohu, a well-known Chinese investor, said that if GPT-5 is not released before the end of the year, Nvidia's stock price may plummet.

Looking ahead, the market is concerned that large-cap technology stocks are overheated, and many investors are choosing to turn to small-cap and value stocks with relatively cheap valuations.

"Nvidia is like a spacecraft, and when things develop so rapidly, no one wants to be the last one to exit. People hope to invest in the current stock market rebound, and if they sell Nvidia, the money most likely to be withdrawn will go to value and cyclical stocks," said Michael Purves, CEO of Tallbacken Capital Advisors.

But for the overall US stock market, under the boom of the bull market, Wall Street analysts are generally more optimistic and have raised their target price for US stocks. Some institutions shouted that the S&P 500 index will reach 6,000 points by the end of the year, while Goldman Sachs has adjusted its year-end expectations for the S&P index three times in a row, in line with some of the most optimistic analysts on Wall Street. The Evercore ISI strategy team boldly predicts that the S&P index will reach 6,000 points at the end of the year, becoming one of the most aggressive long teams on Wall Street.

It is worth noting that this week the US will release extremely important inflation data-the Personal Consumption Expenditures Price Index (PCE) on Friday, which may bring a wonderful conclusion to the first half of the US stock market trend.

Mooers, what do you think of Nvidia's future trends?

Can the AI frenzy continue?

Do you think the US stock market will undergo a style shift in the second half of the year?

Let's discuss in the comments section together~

Editor/Emily