Insider Sales Jump at Broadcom and CoreWeave: Red Flag Ahead?
Insider sales are common in public companies, but investors shouldn't ignore them, especially when unusually high. This may signal insiders view shares as overvalued, a bearish sign. Still, employees and large shareholders need to sell stock for cash. Investors must analyze each sale to understand its true message; not all are bearish.
Below, we’ll detail two of the market's most talked-about artificial intelligence (AI) stocks that have recently seen insider sales spike. Should investors truly worry about these sales, or are they simply distractions amid the big-time rallies in these stocks?
CRWV’s Hedge Fund Investor Massively Increased Sales in September
First up is CoreWeave (NASDAQ: CRWV), the NVIDIA (NASDAQ: NVDA)-backed neo cloud company that has seen its shares go on an incredible run. Since going public in March, shares are up by approximately 237%. The company has announced several deals with AI hyperscaler firms, leading to its huge gains. It also saw revenues rise by 207% last quarter and posted a backlog of $30.1 billion.
However, one of the company’s top investors is now moving out of the stock in a big way. Since Sept. 15, MarketBeat has tracked approximately $1.4 billion worth of insider selling from Magnetar Financial LLC, a hedge fund manager and one of the largest owners of CoreWeave shares. Magnetar's recent sales are notable for several reasons. First, all these sales are discretionary, not under a predetermined plan. They provide a much clearer bearish signal than planned sales.
Additionally, Magnetar’s CoreWeave sales in a span of less than three weeks amount to more than all the company’s insiders' sales in its history. That clearly amounts to a massive spike and should be a warning sign to investors. Lastly, Magnetar sold these shares at an average price of around $129. That’s around 4% below CoreWeave’s Oct. 2 closing price of nearly $135, further amplifying the bearish signal of Magnetar's sales. The firm was willing to sell billions in CoreWeave stock, even when it was trading lower than it currently is.
Broadcom's Insider Sales Soar, But How Much Trouble Do They Truly Spell?
Semiconductor giant Broadcom (NASDAQ: AVGO) has also performed very impressively in 2025. Overall, shares have provided a total return of 47%, driven by robust demand for the firm’s custom AI chips. However, Broadcom has also seen insider sales balloon recently. In September alone, the company saw around $226 million worth of insider sales. That’s slightly more than the $222 million Broadcom saw from April to August, demonstrating the big uptick in selling. Given the stock’s huge appreciation, investors could view this as a red flag. However, it is also important to note that around $125 million, or 55% of these sales, were non-discretionary. This significantly mutes the bearish signal implied by the recent insider sales at Broadcom.
Broadcom’s discretionary sales in September average out to a price of around $340. With Broadcom shares trading at around $338, insiders may not see much more near-term upside in the stock. Despite insider sales, Broadcom remains a strongly growing, highly profitable, and technologically advanced company, maintaining solid long-term prospects. Chief Executive Officer Hock Tan’s long-term AI-driven compensation plan further supports this idea.
CRWV & AVGO: A Tale of 2 Different Insider Sale Signals
Based on the nature of their insider sales, those coming from CoreWeave insiders are much more worrisome than those from Broadcom insiders. Magentar’s sales aren’t overly surprising, given that CoreWeave shares have gone on an absolutely massive run. Overall, investors may want to consider whether smart money is noticing that CoreWeave shares are being driven too much by hype and not enough by fundamentals.
Notably, the firm’s capital expenditures were $2.9 billion last quarter, around 2.4 times higher than its revenue of $1.2 billion. CoreWeave will eventually need to flip this dynamic over the next few years or risk the market changing its tune on this stock. Still, it is very possible that the market will keep rewarding this name for growth in the short term.
Learn more about CRWV
