Insider selling in tech stocks like AppLovin (NASDAQ: APP), Broadcom (NASDAQ: AVGO), and Netflix (NASDAQ: NFLX) spiked in Q4 2024 and could signal a top for the market. Sellers include the CEO, CFO, directors, and critical C-suite personnel in all cases, providing a potentially strong signal. However, selling activity also aligns with companies that utilize share-based compensation, which all of these do. More importantly, these digital technology businesses are supported by strong growth trends that drive cash flow and shareholder value. Institutional and analyst activity offsets the insider sales, reducing the available share count for retail traders and lifting sentiment to new highs. Insider selling is a warning signal for these stocks, but it is not a strong one and is likely to lead to a sustained downtrend or loss of value.
AppLovin Has Solid Outlook for Growth
AppLovin is the most sold stock by insiders for the 90 days leading up to mid-January 2025. Ten insiders, including the CEO and CFO, sold shares but in small amounts. The takeaway is this stock rose meteorically in 2024, advancing roughly 1000% at the peak, providing a significant profit-taking opportunity for insiders and early investors. The stock price advance is driven by sustained, double-digit revenue growth and improving earnings leverage. The forecast for C2025 is for another year of double-digit top-line growth, about 20%, compounded by margin expansion. GAAP earnings are expected to grow by roughly 50%.
Institutional and analyst support is strong for this stock. The analyst's trends include increasing coverage, firming sentiment, and rising price targets that point to fresh highs in 2025. The consensus assumes fair value near the January high,s but revisions are leading to the high-end range and a possible 35% advance by year’s end. Institutional trends include buyers outpacing sellers quarterly in all four quarters of 2024 and the first month of Q1 2025 and total ownership increasing to over 40%.
Confluent Insiders Sell Into the Rally
Confluent’s stock price action isn’t as bullish as AppLovin, but it rose in the second half of 2024, providing an incentive for insiders to sell. Sellers include the CEO, CAO, and several directors, but the group's holdings are still solid at 14%. On the other hand, institutions bought the stock on balance in all four quarters of 2025 and in Q1 2025, more than offsetting the impact. Institutions own more than 78% of the stock and provide a tailwind for the price action.
Analysts also provide a tailwind with increased coverage, firming sentiment, and a rising price target. They see this stock advancing nearly 30% to retest the high-end of a long-term trading range. The outlook for Confluent in 2025 is for slowing growth but still solid double-digit growth and a wider margin.
Broadcom Insiders Sell, But Institutions and Analysts Are Buying
Broadcom insiders also sold into their stocks’ rally late in 2025. However, insider selling is offset by a robust 78% institutional interest, bullish institutional activity, and the analyst. The analysts' sentiment is firm at Buy, but the price target is rising due to outperformance in 2024 and the outlook for custom AI services.
The company’s guidance suggested the custom segment alone could sustain a double-digit CAGR for several years, and other business segments are good. A move to the analyst consensus would be worth a 15% upside in 2025; a move to the high-end range adds another 15%.
Netflix Is the 4th-Most Sold Stock by Insiders in Q4
Netflix is the most sold stock by insiders in Q4, including multiple transactions by CEO and chairman Reed Hastings. However, sales can't be blamed, with the stock up nearly 100% in 2024 and 500% in the last three years. Meanwhile, institutions increased their holdings on balance for the year and command more than 80% of the market.
Analysts' activity is also bullish for this stock, supporting the price action with improving sentiment and increasingly high price targets. That is due to the company’s results, which show strong and stronger-than-expected subscriber growth, improving penetration, success with ad-supported membership, and wider margins. Highlights from 2024’s results include achieving investment-grade debt ratings and substantial capital returns.
The article "Insider Selling in Tech Stocks Spikes in Q4" first appeared on MarketBeat.
