When Insiders Are Not Buying Apple and NVIDIA, Why Are You?

This is not investment advice. The author has no position in any of the stocks mentioned. Wccftech.com has a disclosure and ethics policy.

The current stock market rally is perched on an increasingly precarious precipice, led by just a handful of mega-cap tech names, including Apple and NVIDIA. Meanwhile, company insiders continue to sell like there is no tomorrow. This dichotomy is never a good sign for a sustained bull run, particularly as insiders retain access to the most accurate information on a given company’s short-term prospects.

2 stonks are dominating the market

Yahoo finance pic.twitter.com/jaN1735r7Q

— 🅰🅻🅴🆂🆂🅸🅾 (@AlessioUrban) March 28, 2023

As is evident from the tweet above, big tech names, such as Google, Microsoft, Apple, Tesla, and NVIDIA, have been responsible for most of the gains in the S&P 500 index so far this year. In fact, with the combined weight of Apple and Microsoft in the S&P 500 index now having increased to 13.37 percent, with the iPhone manufacturer alone making up a whopping 7.17 percent of the benchmark index, the market has not been this dependent on just two stocks since 1978, when IBM and AT&T dominated investor psyche.

The snippet above details the stocks that carry the most weight in the S&P 500 index. Notice that all of the top five slots are occupied by mega-tech names. Together, these stocks make up a whopping 20 percent of the benchmark index.

So far this year, Apple is up around 32 percent, while NVIDIA shares have recorded gains of around 90 percent. Apart from the perceived safe-haven status of iPhones as a commoditized luxury in the face of growing macroeconomic headwinds, Apple shares have been gaining ground this year amid the company’s planned entry into the Extended Reality (XR) sphere – a catch-all term that encapsulates Virtual Reality (VR), Augmented Reality (AR), and Mixed Reality (MR) – via its new AR/VR headsets. Similarly, NVIDIA has been on a back-breaking tear as it seeks to capitalize on the current AI-focused hype train in the wake of OpenAI’s ChatGPT phenomenon. As we noted in a previous post, NVIDIA is working on launching its AI-as-a-service business model, which will allow firms to train their AI models in the cloud by leveraging NVIDIA’s GPUs. In fact, the firm seems to have given up on crypto and has fully re-oriented toward this new tech sphere – some say fad.

I wonder if the insiders know something? 🤔

h/t @Barchart pic.twitter.com/5Nz7tgnNNc

— Simon Ree (@simon_ree) April 5, 2023

This brings us to the crux of the matter. As is evident from the tweet above, Apple and NVIDIA insiders have not been buying the current rally. In fact, both stocks have not seen a single insider buy transaction in around a year.

https://twitter.com/InvestRoiss/status/1643489971708338176

Over the past three months, insiders have sold over 300,000 NVIDIA shares. In the same timeframe, Apple insiders have dumped nearly half a million shares. This buying drought and lack of confidence on the part of insiders does not bode well for the ongoing rally’s prospects.

Follow Wccftech on Google to get more of our news coverage in your feeds.