This article presents an overview of Corporate Insiders are Dumping These 5 Tech Stocks. For a detailed overview of such stocks, read our article, Corporate Insiders are Dumping These 11 Tech Stocks.
5. Arista Networks Inc (NYSE:ANET)
Number of Hedge Fund Investors: 64
Arista Networks Inc (NYSE:ANET) has been seeing heavy insider selling activity lately. On March 18, Arista’s CEO Jayshree Ullal sold 20,000 shares of Arista Networks Inc (NYSE:ANET) at $282.41 per share. Since then the stock has gained about 5.3%. BofA Securities recently published a list of “breakthrough” stocks under various themes. Arista Networks Inc (NYSE:ANET) was one of these stocks under the communications theme.
As of the end of the fourth quarter of 2023, 64 hedge funds tracked by Insider Monkey had stakes in Arista Networks Inc (NYSE:ANET).
Giverny Capital Asset Management stated the following regarding Arista Networks, Inc. (NYSE:ANET) in its fourth quarter 2023 investor letter:
“We did a bit of portfolio sculpting during the year, with mixed results. We trimmed Arista Networks, Inc. (NYSE:ANET) several times during the year as it soared. Those trims, a very small one in March at roughly $163 and a larger one in August at $183, don’t look smart with Arista finishing the year at $235 (and up more in January). Arista rose 94% this year. The good news is, Arista finished the year as our second largest holding, at 7.9% of the portfolio.
If you are wondering how I could sell some Arista at $163 but then hold most of it at $235, the answer is that Arista’s outstanding competitive position in Artificial Intelligence became clearer to me as the year progressed. I felt in March that Arista would earn $8 per share in a few years. I see today that it might earn $8 in 2025.
It’s possible there is AI-related froth in the Arista stock price, but also probable that Arista will continue to grow rapidly as the computing centers that process AI queries require enormous amounts of data bandwidth. I believe Arista’s routers and switches are the best tools for routing so-called hyperscale traffic. Also, its operating software allows computer giants to manage the kudzu-like growth of their data centers, lowering their total cost of operation.
The sales of both Arista and Heico reflected my desire to manage PE multiple risk. I keep learning the hard way, however, that trimming your winners generally doesn’t add value. If the valuation is beyond justification, sell the position. If the valuation is high but the business continues to dominate its niche, grow steadily and add value for customers, maybe just take a walk around the block until the urge to sell goes away.”
4. Datadog Inc (NASDAQ:DDOG)
Number of Hedge Fund Investors: 72
Cloud software company Datadog Inc (NASDAQ:DDOG) is one of the stocks with recent insider selling in 2024. On March 14, Dev Ittycheria, one of the directors at Datadog Inc’s (NASDAQ:DDOG) board, sold 185,000 shares of Datadog Inc (NASDAQ:DDOG) at $121.96 per share. The stock price has remained almost flat since then.
A total of 72 hedge funds out of the 933 funds tracked by Insider Monkey had stakes in Datadog Inc (NASDAQ:DDOG) as of the end of 2023, down from 83 hedge funds in the previous quarter.
The Brown Capital Management Small Company Fund stated the following regarding Datadog, Inc. (NASDAQ:DDOG) in its fourth quarter 2023 investor letter:
“We recognize that EGCs do not grow in straight lines. They stumble and sometimes fall. But they also have inflection points that lead to step functions of growth and profitability. We have been well-served by staying invested during tough periods. In fact, our patience and tolerance often allow us to participate in significant upside when our long-term thesis materializes.
For example, Datadog, Inc. (NASDAQ:DDOG) is an EGC that has experienced stock price declines driven by near-term challenges. Datadog is a leading SaaS-based IT-monitoring and analytics platform that automates the real-time monitoring of infrastructure, application performance and networks. This enables Datadog’s customers to quickly identify and address performance issues in their networks. While competitors only provide a siloed view of cloud infrastructure, applications, logs or networks, Datadog is differentiated by providing a unified view across all these areas via a visual interface configured to the needs of individual users. The technology saves time, money and headaches by driving collaboration among development, operations and business teams; accelerating time-to-market of new software; reducing the time needed to resolve problems; improving infrastructure efficiency; and enabling a better understanding of customer behavior…” (Click here to read the full text)
3. Booking Holdings Inc (NASDAQ:BKNG)
Number of Hedge Fund Investors: 83
Travel platform company Booking Holdings Inc (NASDAQ:BKNG) ranks third in our list of the tech stocks that recently saw insider selling. Booking Holdings Inc (NASDAQ:BKNG) CEO Glenn D. Fogel on March 15 sold about 5800 shares of Booking Holdings Inc (NASDAQ:BKNG) at $3,455.93 per share. Since then the stock has increased by 6.8%.
As of the end of the last quarter of 2023, 83 hedge funds out of the 933 funds tracked by Insider Monkey had stakes in Booking Holdings Inc (NASDAQ:BKNG). The biggest stakeholder of Booking Holdings Inc (NASDAQ:BKNG) was Ken Fisher’s Fisher Asset Management which owns a $1.3 billion stake in Booking Holdings Inc (NASDAQ:BKNG).
Ensemble Capital Management stated the following regarding Booking Holdings Inc. (NASDAQ:BKNG) in its fourth quarter 2023 investor letter:
“Booking Holdings Inc. (NASDAQ:BKNG) (7.60% weight in the Fund): Earlier this year, Booking Holdings rolled out an AI trip planner. Traditionally Booking helps users find the right hotel by offering a search engine to define which city you want to stay in and apply various filters to narrow down the hotel options. With Booking’s AI Trip Planner, a user can use natural language such as “plan a road trip on Route 66, starting in Chicago and ending to Los Angeles.” The Trip Planner then engages with the user like a travel agent, suggesting which cities to stay in each night and various sights to see along the way. Once the trip is planned out, the user can use natural language to generate hotel options, such as by writing “My budget is $200 to $300 a night. It will be my husband and I traveling together.”
Booking’s experiments in AI demonstrate the value of proprietary data sets. While general AI systems such as ChatGPT are designed to answer questions about anything, focused AI systems that leverage a company’s unique data can be far more powerful when applied to specific use cases. With Booking’s AI Trip Planner, the system is unable to answer questions unrelated to making travel reservations. But on the other hand, it is far more likely to understand what the user wants since it already knows that the entire conversation will be about travel. Importantly, Booking’s AI Trip planner has access to the company’s enormous dataset that includes hotel ratings, popular hotels, and all sorts of detailed information about each hotel.”
2. Advanced Micro Devices, Inc. (NASDAQ:AMD)
Number of Hedge Fund Investors: 120
Advanced Micro Devices, Inc. (NASDAQ:AMD) CEO Lisa Su on February 21 sold 125,000 shares of the company at $163.35 per share. Since then through March 21 the stock price has seen an 8.8% jump. Advanced Micro Devices, Inc. (NASDAQ:AMD) shares recently jumped after Advanced Micro Devices, Inc. (NASDAQ:AMD) posted strong quarterly results. Analysts are turning bullish on the stock amid AI-related growth catalysts.
J.P. Morgan analyst Harlan Sur recently said in a note that Advanced Micro Devices, Inc. (NASDAQ:AMD) is positioned well due to “strong AI /accelerated compute server deployments with [High Bandwidth Memory 3E] already sold out for CY24 and the majority of CY25 supply having already been allocated.”
Jackson Peak Capital stated the following regarding Advanced Micro Devices, Inc. (NASDAQ:AMD) in its fourth quarter 2023 investor letter:
“On the long side of the portfolio, a core theme we remain invested behind is the data center infrastructure buildout and AI chips arms race that we’ve discussed since our first letter in Q2. Some skepticism has crept into the market, and it’s understandable given the huge ramp in 2023. However, our research continues to suggest 2023 was the start of a multi-year platform shift. Value will accrue to varying segments of the AI value chain at different parts of the cycle. We continue to see value in the “boots on the ground” winners in the data center buildout (Vertiv, Modine Manufacturing, Celestica). Our positioning in AI semiconductor companies (NVDA and Advanced Micro Devices, Inc. (NASDAQ:AMD)) has ebbed and flowed given we are cognizant (perhaps too much so) that these names are crowded positions across investor style types. We’ve done well in these chip stocks since inception and NVDA is currently a long, and we’re trying to “let winners run” while using sizing to risk manage these names due to the market-wide positioning bias in semiconductors.”
1. NVIDIA Corp (NASDAQ:NVDA)
Number of Hedge Fund Investors: 173
NVIDIA Corp (NASDAQ:NVDA) continues to see huge demand for its GPUs. NVIDIA Corp (NASDAQ:NVDA) recently revealed what it called the most powerful AI chip in the world. NVIDIA Corp’s (NASDAQ:NVDA) Blackwell B200 GPU and GB200 “superchip” would cost at least $30,000. NVIDIA Corp (NASDAQ:NVDA) earlier this month saw an important insider selling transaction when one of its board directors, Tench Coxe, sold 200,000 shares of NVIDIA Corp (NASDAQ:NVDA) at $850.10 per share on March 5. Since then through March 22 the stock has gained about 6.36%.
Orbis Global Equity Strategy stated the following regarding NVIDIA Corporation (NASDAQ:NVDA) in its fourth quarter 2023 investor letter:
“Never before has following the crowd made so much money. Nor, in our estimation, so little sense. But just look at the opportunities the crowd has left for those of us willing to take a different view. We could wax lyrical about the glaring difference in value between Korean banks priced at 4 times earnings, versus Apple at 28 times, despite diverging fundamentals—Apple is increasingly at risk of bans in China, while Korean banks could double their dividends.
Or how the thick margin of safety at Intel, backed by listed stakes and real saleable assets, compares to the slim margin for error at NVIDIA Corporation (NASDAQ:NVDA), trading at 13 times next year’s projected revenue. That revenue that could be competed away over time, while Intel’s semiconductor “fabs” in the US are increasingly valuable as the east and the west drift further apart.
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