NextFin News - On January 22, 2026, First Merchants Corp disclosed a strategic reduction in its investment in NVIDIA Corporation (NASDAQ:NVDA), according to its latest Form 13F filing with the Securities and Exchange Commission. The institutional investor sold 11,550 shares during the third quarter, representing a 6.8% decrease in its position. Following the transaction, First Merchants Corp retains 159,270 shares of the semiconductor giant, valued at approximately $29.72 million. This holding now accounts for 1.1% of the firm's total investment portfolio, positioning NVIDIA as its 20th largest asset.
According to MarketBeat, this move by First Merchants Corp coincides with a period of heightened volatility and significant insider activity at the Santa Clara-based company. In the last three months alone, NVIDIA insiders have disposed of 1,536,474 shares, worth an estimated $281.14 million. Notable transactions include Director Mark A. Stevens selling 222,500 shares for over $40 million in December 2025, and Chief Financial Officer Colette Kress liquidating 27,640 shares for approximately $5.11 million in mid-January 2026. Currently, corporate insiders retain a 4.17% stake in the company, which remains a global leader in graphics processing units (GPUs) and artificial intelligence (AI) infrastructure.
The divestment by First Merchants Corp reflects a nuanced institutional response to NVIDIA’s current market valuation and the evolving regulatory landscape. Despite the share reduction, NVIDIA’s fundamental performance remains robust. The company recently reported quarterly revenue of $57.01 billion, a 62.5% increase year-over-year, and earnings per share of $1.30, which exceeded analyst expectations of $1.23. However, the broader market is weighing these gains against new headwinds. U.S. President Trump recently implemented a 25% tariff on advanced computing chips, including NVIDIA’s high-end H200 series, specifically targeting shipments to China. This policy shift has introduced significant friction into NVIDIA’s international sales strategy, particularly as reports suggest that Chinese regulatory clearance for the H200 remains stalled.
From an analytical perspective, the reduction in holdings by First Merchants Corp and other institutional players like Commonwealth Equity Services LLC—which lowered its stake by 13.2%—suggests a transition from aggressive growth to tactical capital preservation. With a price-to-earnings (P/E) ratio of 45.49 and a market capitalization exceeding $4.4 trillion, NVIDIA is priced for perfection. Any disruption in the global supply chain or a slowdown in hyperscaler capital expenditure could trigger significant corrections. The recent 25% tariff under U.S. President Trump’s administration serves as a primary catalyst for this caution, as it directly impacts the margin profile of NVIDIA’s most lucrative data center products in the Asian market.
Furthermore, the trend of insider selling provides a critical signal to the market. When high-ranking executives like Kress and long-term directors like Stevens liquidate substantial portions of their holdings, it often indicates a belief that the stock may be approaching a local ceiling. While CEO Jensen Huang continues to advocate for trillions in AI infrastructure spending, the immediate reality involves navigating a bifurcated global market where U.S. national security interests frequently clash with corporate revenue goals. The market is also seeing a rotation into memory and storage providers, such as Micron, as investors seek to diversify their AI exposure beyond the GPU-centric narrative that dominated 2024 and 2025.
Looking forward, NVIDIA’s trajectory will likely be defined by its ability to maintain its technological moat while adapting to the "America First" trade policies of U.S. President Trump. Analysts remain generally optimistic, with a consensus "Buy" rating and a target price of $263.41, but the path to that valuation is increasingly fraught with geopolitical risk. If NVIDIA can successfully navigate the China market restrictions and maintain its 60%+ revenue growth, institutional confidence may rebound. However, for the first half of 2026, the prevailing trend among mid-sized institutional funds like First Merchants Corp appears to be one of cautious rebalancing, securing profits while the AI-driven bull market remains intact but increasingly sensitive to policy shifts.
Explore more exclusive insights at nextfin.ai.
