- United States
With 66% institutional ownership, NVIDIA Corporation (NASDAQ:NVDA) is a favorite amongst the big guns
- Institutions' substantial holdings in NVIDIA implies that they have significant influence over the company's share price
- 45% of the business is held by the top 25 shareholders
- Insiders have been selling lately
If you want to know who really controls NVIDIA Corporation (NASDAQ:NVDA), then you'll have to look at the makeup of its share registry. We can see that institutions own the lion's share in the company with 66% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).
Given the vast amount of money and research capacities at their disposal, institutional ownership tends to carry a lot of weight, especially with individual investors. Therefore, a good portion of institutional money invested in the company is usually a huge vote of confidence on its future.
Let's delve deeper into each type of owner of NVIDIA, beginning with the chart below.
View our latest analysis for NVIDIA
What Does The Institutional Ownership Tell Us About NVIDIA?
Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.
As you can see, institutional investors have a fair amount of stake in NVIDIA. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of NVIDIA, (below). Of course, keep in mind that there are other factors to consider, too.
Institutional investors own over 50% of the company, so together than can probably strongly influence board decisions. NVIDIA is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is The Vanguard Group, Inc. with 8.3% of shares outstanding. BlackRock, Inc. is the second largest shareholder owning 7.3% of common stock, and FMR LLC holds about 5.3% of the company stock. In addition, we found that Jen-Hsun Huang, the CEO has 3.5% of the shares allocated to their name.
Our studies suggest that the top 25 shareholders collectively control less than half of the company's shares, meaning that the company's shares are widely disseminated and there is no dominant shareholder.
While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.
Insider Ownership Of NVIDIA
The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.
Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.
Shareholders would probably be interested to learn that insiders own shares in NVIDIA Corporation. Insiders own US$23b worth of shares (at current prices). we sometimes take an interest in whether they have been buying or selling.
General Public Ownership
The general public, who are usually individual investors, hold a 30% stake in NVIDIA. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.
It's always worth thinking about the different groups who own shares in a company. But to understand NVIDIA better, we need to consider many other factors. Consider for instance, the ever-present spectre of investment risk. We've identified 3 warning signs with NVIDIA , and understanding them should be part of your investment process.
If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.
NB: Figures in this article are calculated using data from the last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. This may not be consistent with full year annual report figures.
Valuation is complex, but we're helping make it simple.
Find out whether NVIDIA is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.View the Free Analysis
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
NVIDIA Corporation provides graphics, and compute and networking solutions in the United States, Taiwan, China, and internationally.
High growth potential with excellent balance sheet.