Key Points
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Wall Street’s Magnificent Seven have been the foundation of the stock market’s outperformance.
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Form 4 filings point to heightened net selling activity over the last year by insiders.
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Even more concerning has been the virtual lack of buying (with one exception) by Magnificent Seven executives, board members, and beneficial owners.
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For the better part of this decade, the bulls have been in firm control on Wall Street. While game-changing technology trends, such as the rise of artificial intelligence (AI), have undoubtedly played an important role in sending the broader market higher, Wall Street’s “Magnificent Seven” have been the foundation of this rally.
In descending market cap, the Magnificent Seven consists of:
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These are industry-leading companies with sustainable competitive advantages and often cash-rich balance sheets. Furthermore, all seven find themselves at the forefront of the AI revolution, from an investment and application standpoint.
But these same companies, responsible for sending the stock market to new heights, are collectively sending shockwaves through Wall Street with an $8.4 billion warning.
The trading activity of insiders tells a worrisome story
The concern stems from the trading activity of insiders at all seven aforementioned companies. An “insider” is a high-ranking executive, board member, or beneficial owner holding at least 10% of outstanding shares who may have non-public information.
For the sake of transparency, as well as to comply with the securities law, insiders are required to report any buying and selling activity of their company’s stock, including the exercise of stock options, within two business days of a transaction via Form 4 with the Securities and Exchange Commission.
According to aggregated Form 4 filings, Magnificent Seven insiders have been selling their company’s stock in droves over the trailing year (as of Feb. 22, 2026):
- Nvidia: $2,249,988,017 in net selling
- Apple: $129,956,722 in net selling
- Alphabet: $251,759,211 in net selling
- Microsoft: $163,943,850 in net selling
- Amazon: $5,724,146,695 in net selling
- Meta Platforms: $436,549,333 in net selling
- Tesla: $542,118,217 in net buying
With the exception of electric-vehicle maker Tesla, which saw CEO Elon Musk purchase approximately $1 billion of his company’s shares in mid-September, insiders at the other Magnificent Seven companies have been big-time net sellers of their company’s shares. An aggregate of $8,414,225,611 has been net-sold over the trailing year across all seven companies.
The caveat to this insider trading data is that not all selling is inherently bad. Since most executives and board members are primarily compensated in stock and/or options, they subsequently exercise options or sell shares to cover their federal and/or state tax liability. Tax-based selling isn’t something investors should worry about.
Image source: Getty Images.
But there are two sides to this coin. While there are several reasons to sell, not all of which are nefarious, there’s only one reason to buy: the expectation that shares will head higher. With the exception of Musk’s billion-dollar buy, insider purchases have been almost nonexistent.
Over the trailing year, not one insider has spent a dime buying shares of Nvidia, Apple, Amazon, or Meta Platforms. Meanwhile, insider buying at Microsoft and Alphabet was a relatively tame $3.4 million and $5 million, respectively.
Insiders at Wall Street’s most influential companies selling a boatload of stock and not buying their respective shares amid a historically expensive stock market is a potential red flag that investors would be wise not to ignore.
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Sean Williams has positions in Alphabet, Amazon, and Meta Platforms. The Motley Fool has positions in and recommends Alphabet, Amazon, Apple, Meta Platforms, Microsoft, Nvidia, and Tesla. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
