One signal

Insiders at Nvidia, Palantir and Tesla have sold a combined $52.7bn more in shares than they bought over the past five years, according to a Motley Fool analysis published by Yahoo Finance. The figures concern three prominent companies tied to AI hardware, software and applications, but they are not a verdict on the technology’s prospects.

The analysis notes that executives may sell shares to cover tax bills, so selling alone is not proof that insiders expect their companies to falter. It also points to scant insider buying, while arguing that investors may be overestimating how quickly businesses will turn AI into higher profits. That is an investment argument, not evidence that an AI bubble is about to burst. Still, the gap between AI’s promise and the pace of commercial returns is worth watching.

Discuss: How much weight should investors give insider selling when tax-driven sales muddy the signal?

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