The recent developments in generative AI has been a boon for many companies in the technology sector during the first half of 2023, with some companies experiencing double- or triple-digit growth in stock price year-to-date. As tech firms incorporate AI into their product offerings, company insiders have been increasingly selling shares to benefit from the buzz around AI. Here are a few notable companies who are developing AI-related products.
Semiconductor manufacturer NVIDIA Corp (NVDA), which topped the $1 trillion market cap threshold recently, is poised to make even greater strides as AI's popularity increases. NVDA is the largest producer of GPUs, a chip that processes the data required in AI applications more efficiently than conventional microchips. Their dominance in GPU manufacturing has resulted in a 304% gain in share price over the past nine months. Insider selling at the company has accelerated along with the gains. Directors Tench Coxe and Harvey Jones Jr. have both made sizable sales this past quarter, selling a total of $59 million and $76.7 million, respectively. Director Mark Stevens recently filed to sell an uncharacteristically sizable $323 million through his affiliated trust. If completed as filed, this sale will make June 2023 the month with the highest ever aggregate value sold by insiders at the company.
Other tech firms are trying to find ways to leverage AI to improve their core competencies, as is the case with cloud-based customer data management company Salesforce Inc. (CRM). In a press release in late May, the company announced a strategic partnership with Google to develop AI-based customer data products. CRM shares have appreciated 63.6% so far this year. As a result of the boost to share prices, insiders at CRM have increased selling activity as well. Most notably, Chairman and CEO Marc Benioff sold $104.6 million in early June, making this the month with the highest aggregate value sold by CRM insiders since October 2021.
Even some companies that are not traditionally tech companies are getting boosts from AI. Intuitive Surgical Inc. (ISRG), which manufactures robotic-assisted surgery equipment, recently developed a product that leverages AI to enhance surgical performance. This software creates 3D computerized models from patients' CT scans, allowing surgeons to prepare for surgeries well before they set foot in the operating room. ISRG shares have jumped 85% in the past nine months. Discretionary insider selling has not yet increased at the company, which may imply a belief in AI's ability to continue bolstering future earnings and share price.
AI has the power to revolutionize the modern business world. Its effects can already be seen in the technology sector, and as the technology matures, its influence is likely to reach many other industries. Investors may consider remaining alert to developments in generative AI.