In this article, we will take a detailed look at Latest Insider Selling: 10 Large-Cap Tech Stocks to Watch. For a quick overview of the 5 such stocks, read our article Latest Insider Selling: 5 Large-Cap Tech Stocks to Watch.
Large-cap technology stocks have been the biggest beneficiaries of the AI revolution that apparently has no end in sight as companies continue to develop innovative AI solutions.
However, some analysts believe large-cap tech stock valuations have gone too far and need a breather. They urge investors to look beyond large-cap tech stocks and focus on pick-and-shovel AI plays that will play a key role in the development, deployment and usage of generative AI applications. And these companies are seeing a rapid rise in investor sentiment over the past few months. State Street Global Advisors said in a report in January that its SPDR NYSE Technology ETF(XNTK), which includes 35 US stocks, had outperformed the S&P 500 Tech sector and the S&P 500 Index by 6% and 9% since June. So far this year, the ETF has gained about 14.2%, better than the S&P 500’s gain of about 10.6%. The report said that earnings estimates of XNTK’s benchmark have been upgraded by 10% since June.
BlackRock in its latest market commentary released March 25 said that it remains Overweight US stocks, especially AI-related stocks, because it believes the overall market backdrop remains positive despite high valuations of some technology stocks. BlackRock cited Bloomberg data which says that tech companies were expected to account for almost half of the total S&P 500 earnings this year.
BlackRock also rejected the notion that the current tech stocks rally is similar to the dot com bubble.
“To compare the periods, BlackRock’s systematic equities team analyzed 400 metrics related to valuations and other features and found that the number flashing red now is 50% lower than when the dot-com bubble burst in 2000.”
However, BlackRock listed some scenarios that could change its market thesis. It believes if inflation remains subdued in the short term but rebounds later, the Fed could settle for a higher for longer scenario in which interest rates would stay elevated.
“Persistent inflation pressures from mega forces, or big structural shifts we see driving returns, also call for a higher neutral rate – the interest rate that neither stokes nor limits economic activity – than in the past. We think the Fed’s nudgedup long-run policy forecasts are starting to reflect our view of rates staying higher for longer than pre-pandemic. Markets are not eyeing that outlook for now. Second, stocks could grow more sensitive to macro news as profit margin pressures mount.”
In this backdrop, it’d be interesting to see which large-cap stocks corporate insiders are selling. For this article we used Insider Monkey’s insider trading stock screener to find large-cap tech stocks that saw insider selling activity over the past few weeks. But why is it important to keep tabs on hedge fund and insider activity? Hedge funds’ top 10 consensus stock picks outperformed the S&P 500 Index by more than 140 percentage points over the last 10 years (see the details here).
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10. MicroStrategy Inc (NASDAQ:MSTR)
Number of Hedge Fund Investors: 16
Michael Saylor, the executive chairman and 10% owner at MicroStrategy Inc (NASDAQ:MSTR), has been dumping MicroStrategy Inc (NASDAQ:MSTR) shares rapidly over the past several months. On March 22 Saylor sold 5,000 shares of MicroStrategy Inc (NASDAQ:MSTR). On March 21, the former CEO of MicroStrategy Inc (NASDAQ:MSTR) dumped 1,260 shares of MicroStrategy Inc (NASDAQ:MSTR) at $1,680.49 per share. Since March 21, the stock has jumped by about 16%.
As of the end of the fourth quarter of 2023, 16 hedge funds out of the 933 funds tracked by Insider Monkey had stakes in MicroStrategy Inc (NASDAQ:MSTR). The most significant stakeholder of MicroStrategy Inc (NASDAQ:MSTR) during this period was Dmitry Balyasny’s Balyasny Asset Management which owns an $18 million stake in MicroStrategy Inc (NASDAQ:MSTR).
In an earnings call last month, the company talked about its focus areas in 2024:
“In 2024, we will continue our transformation focus to wane and grow in AI plus BI, while accelerating our transition to a cloud-centric operating model. Our key strategic goals are to grow cloud, innovate with AI, and increase profitability. So first, let me cover growing with cloud. MicroStrategy Cloud is a key area of our research and development efforts as we expand our platform’s flexibility, scalability, and security. In December, we successfully deployed our Google Cloud platform integration, furthering our multi-cloud capabilities, providing greater optionality to our customers. This offering is microservices and container-based and uses our most recent cloud innovations. As of today, MicroStrategy can be deployed and fully hosted on Azure, AWS, and GCP.
Additionally, we’ll provide the ability to automate deployment of MicroStrategy with many of the same benefits of a public cloud, but in a private cloud later this year. This distinguishes us from other BI platforms with the flexibility and automation that enterprise customers require. We believe such investment and capability will encourage current on-premise customers to embrace the benefits of MicroStrategy Cloud, such as containerized architecture, proactive cloud management from experts, seamless backups, and single click updates. Transitioning our customer base to the technology of the future remains a key focus, and our resource deployment underscores our commitment to the cloud first approach. As customers and prospects move to the cloud to empower their AI-driven digital transformations, we expect a decrease in product license revenues.
This will in part be offset by increases in subscription services revenues in the same year and will be more than offset with higher recurring revenues in the following years. This will be most pronounced in 2024 as we expect to increase the pace of cloud adoption. Besides more healthy recurring revenues, additional benefits of moving customers and prospects to cloud include more engaged and happy customers using our latest software, resulting in higher retention rates. The second area of focus for our software business is to innovate with AI.”
Read the entire earnings call transcript here.
9. F5 Inc. (NASDAQ:FFIV)
Number of Hedge Fund Investors: 29
Frank Pelzer, who is the Executive Vice President and Chief Financial Officer at Cloud security company F5 Inc. (NASDAQ:FFIV), on March 20 sold 500 shares of F5 Inc. (NASDAQ:FFIV) at $189.12 per share. Since then the stock has slipped about 0.5%.
8. Akamai Technologies Inc (NASDAQ:AKAM)
Number of Hedge Fund Investors: 37
Cloud security services company Akamai Technologies Inc (NASDAQ:AKAM) is one of the large-cap technology stocks insiders are selling. Akamai Technologies Inc’s (NASDAQ:AKAM) COO Adam Karon on March 22 sold 14,349 shares of Akamai Technologies Inc (NASDAQ:AKAM) at $109.78 per share. The stock price is flat since then.
Paul Joseph, EVP, Global Sales and Services, sold 34,595 Akamai Technologies Inc (NASDAQ:AKAM) shares on March 15, 2023 at $108.09 per share.
7. HP Inc (NYSE:HPQ)
Number of Hedge Fund Investors: 50
Robert R. Bennett, a board member at HP Inc (NYSE:HPQ), on March 21 sold 67,000 shares of HP Inc (NYSE:HPQ) at $30.01 per share. In another insider selling transaction dated March 8, Stephanie Liebman, SVP-Finance & Controller at HP Inc (NYSE:HPQ), dumped 8,708 HPQ shares at $30.93 per share. Since March 8, the stock price has decreased by 2.8%.
As of the end of the last quarter of 2023, 50 hedge funds out of the 933 funds tracked by Insider Monkey had stakes in HP Inc (NYSE:HPQ). The biggest stake in HP Inc (NYSE:HPQ) belongs to Warren Buffett’s Berkshire Hathaway which owns a $688 million stake in HP Inc (NYSE:HPQ).
Last month, during its latest earnings call, the company talked about guidance:
“We expect Q2 supplies revenue to be down mid-single-digit in constant currency, and we still expect Supplies revenue will decline low to mid-single-digits for the year. Quarterly results can vary. For Q2, we expect print margins to be at the high end of our 16% to 19% range and solidly within the range for FY ’24. We continue to focus on driving print operating profit dollars through new business models and rigorous cost management, including future-ready transformation savings. Taking these considerations into account, we are providing the following outlook for Q2 and fiscal year 2024. We expect second quarter non-GAAP diluted net earnings per share to be in the range of $0.76 to $0.86 and second quarter GAAP diluted net earnings per share to be in the range of $0.58 to $0.68.
We expect FY ‘24 non-GAAP diluted net earnings per share to be in the range of $3.25 to $3.65 and FY ’24, GAAP diluted net earnings per share to be in the range of $2.61 and $3.01. In closing, we started off our new fiscal year making solid progress against our strategic objectives and full year commitments while managing through demand and competitive challenges that have persisted in the current dynamic environment.”
Read full earnings call transcript here.
6. Dell Technologies Inc (NYSE:DELL)
Number of Hedge Fund Investors: 56
Dell Technologies Inc (NYSE:DELL) has been seeing some heavy insider selling activity this year. Dell Technologies Inc’s (NYSE:DELL) CEO Michael Dell on March 14 dumped 1.34 million shares of Dell Technologies Inc (NYSE:DELL) at $107.72 per share. On March 19 he sold 2,977,478 Dell Technologies Inc (NYSE:DELL) shares at $108.52 per share. Since then through March 25 the stock has fallen by about 5%.
As of the end of the last quarter of 2023, 56 hedge funds out of the 933 funds tracked by Insider Monkey had stakes in Dell Technologies Inc (NYSE:DELL). The biggest stakeholder of Dell Technologies Inc (NYSE:DELL) was Panayotis Takis Sparaggis’s Alkeon Capital Management which owns a $383 million stake in Dell Technologies Inc (NYSE:DELL).
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Disclosure. None. Latest Insider Selling: 10 Large-Cap Tech Stocks to Watch was initially published on Insider Monkey.
