Nancy Pelosi's Aggressive Stake in Nvidia and Broadcom: Is Insider Info at Play?

Nancy Pelosi is no doubt the queen of trading. After making nearly $4 million from her call options on Nvidia since late November 2023, she has moved again by buying 10,000 shares of Nvidia and 20 call options on Broadcom, showing a strong bullish stance on AI. Whether there is any insider information or just fundamental analysis, the two stocks have pumped up.

According to the transaction records disclosed by Congress on Wednesday, Pelosi bought 10,000 shares of Nvidia on June 26 (currently valued at approximately $1.3 million) and 20 call options on Broadcom with an $800 strike price expiring on June 20, 2025, on June 24 (currently valued at around $1.92 million). For a seasoned political figure, this nearly $3.3 million investment is quite the bold move.

Although these transactions took place last month, the news released on Wednesday triggered a market frenzy, with Nvidia and Broadcom both soaring over 4% during the shortened trading day. These two AI-beneficiary semiconductor stocks have surged 159% and 56%, respectively, this year.

Despite no longer serving as the Speaker of the U.S. House of Representatives, Pelosi remains a congresswoman representing her district in California. Her 37 years in Congress give her substantial influence, further bolstered by her alignment with current U.S. President Joe Biden. Meanwhile, she remains keen on stock trading, with a 65% return on investments in 2023, 2.7 times the S&P 500's performance during the same period. Hence, her every move is closely watched by investors.

This isn't the first time Pelosi has made such bold moves. Back in late November of last year, she disclosed buying 50 call options on Nvidia with a $120 strike price set to expire on December 20, 2024. The cost was around $1.88 million based on the closing price that day. As Nvidia's stock continued its ascent this year, these call options are now valued at $5.83 million, yielding an unrealized gain of nearly $4 million. Following her lead indeed seems profitable.

Note: Nvidia's stock underwent a 1-for-10 split during this period, thus Pelosi's position has been adjusted to 500 call options with a $12 strike price expiring on December 20.

Alongside her new purchases, Wednesday's disclosure also revealed that Pelosi reduced her holdings by selling 2,500 shares of Tesla and 2,000 shares of Visa. Though Tesla surged more than 24% this week, the former Speaker sold her shares. However, with Nvidia and Broadcom in her portfolio, these minor gains might not concern her much.

For investors, Pelosi buying stocks essentially feels like an endorsement from a prominent U.S. figure. Given her proven track record and the current momentum of the Democratic Party, whether driven by optimism about Nvidia's prospects or insider information, her purchases provide a boost for AI-trading enthusiasts. The major question now is whether Nvidia's stock will regain its upward momentum with her increased stake.