Nvidia’s Had a Rough Week, But Will Jensen Huang’s Hype Machine Hide This Glaring Issue?

Nvidia (NVDA) stock has been getting clobbered this week (like it wandered into the ring with prime Conor Mcgregor and forgot to put its gloves on kind of clobbered). 

But with his stock down 6%, as always, Jensen Huang, Nvidia’s CEO, knows how to play the game. His move? Jump on CNBC and hype the living daylights out of Nvidia’s latest creation—the Blackwell AI processors. Because, when in doubt, talk about shiny new tech to get everyone’s attention.

(Source: TechPowerUp)

Huang’s pitch? “Everybody wants to be the first to get their hands on it,” he declared, practically waving a “Buy Now!” sign in the air. And he’s not exaggerating. These Blackwell processors are expected to deliver 2.5 times the performance of Nvidia's previous Hopper chips, which is like trading in your old honda civic for a sleek, fully-loaded lambo—it’s a whole new level of power.

But let’s pump the lambo brakes for a second. While Blackwell’s shiny new features might have everyone drooling, there’s an elephant in the room that’s hard to ignore—Nvidia insiders have been cashing out big time.

 We’re talking $1.8 billion worth of shares sold this year alone. And Huang? He’s been one of the biggest sellers, unloading $713 million between June and September. Sure, these sales were part of a pre-arranged plan, but when you see that much stock leaving the hands of insiders, it’s hard not to want to do a little research.

Meanwhile, Nvidia’s stock has been bouncing around like my son after I gave him a cookie. Since June, we’ve seen two major drops of over 20%. The main culprit? Concerns that the AI spending craze might not be as endless as people thought. It’s like everyone suddenly remembered that tech bubbles do, in fact, pop.

(Source: AvaTrade)

So, what’s the deal? Nvidia is putting all their chips on the table (pun intended) that Blackwell will drive future growth, but the timing of these insider sales isn’t exactly giving investors warm fuzzies. As one analyst put it, “This is probably one less reason for someone to make a new purchase.”

At the end of the day, Nvidia’s success doesn’t just rely on Blackwell delivering mind-blowing performance. The real question is whether this new AI chip can justify Nvidia’s sky-high valuation or if we’re about to see another wave of insider selling that shakes investor confidence.

Let’s break it down: Nvidia is currently valued at over $1 trillion, but when you look at its earnings per share (EPS), the numbers tell a different story. Nvidia’s trailing 12-month EPS sits around $3.87. Compare that to Apple, which, with a valuation of about $2.7 trillion, boasts an EPS of $6.11. Apple’s EPS is over 50% higher, yet Nvidia’s stock price suggests it’s in the same ballpark as Apple in terms of market value. Something’s not adding up.

So, yeah, it’s a risky stock to jump into at this valuation, but would I count Nvidia out? Absolutely not. Betting against Nvidia in the AI space feels like trying to bet against gravity. It might look crazy expensive right now, but when a company consistently reshapes an entire industry, you can’t exactly write them off.

P.S. 54% short interest, and a 648.5% borrow fee?! Once this catalyst hits this little known stock… we could be going to the moon! Of course, we’ll be dropping the ticker symbol sometime soon… so click here ASAP to upgrade to premium so you don’t miss out on this seismic opportunity.

Stock.News has positions in Apple.