2 Stocks Nancy Pelosi Just Bought, and 1 She Sold. Should You Follow Pelosi’s Trades? (2024)

Congress has an uncanny knack for making remarkably well-timed stock trades. They pinky swear they are not buying and selling stock based on insider information culled from their regulation of the companies. Yet the politicians tend to dramatically outperform the S&P 500.

One of the best at this is former House Speaker Nancy Pelosi. Her performance over time has been so good that there are sites dedicated to just tracking all of her trades. She also opposes any attempt at limiting her ability to buy and sell stocks. She told reporters in 2021, “We are a free market economy. (Politicians) should be able to participate in that.”

Pelosi recently filed her latest Periodic Transaction Report with Congress. It shows she’s not infallible. She sold 5,000 shares of Tesla (NASDAQ:TSLA) stock at $140 a share, meaning she lost over $500,000 on her trade. It also means she missed on Tesla’s recovery as its stock now trades at $260 a stub.

So just like with any investing guru, it’s always wise to do your own due diligence first. But here are two Nancy Pelosi stocks she recently bought and one she sold. Let’s see if you should follow suit.

Nvidia (NVDA)

According to Pelosi’s filing, she purchased 10,000 shares of Nvidia (NASDAQ:NVDA) worth between $1 million and $5 million. It builds on other Nvidia transactions she has made in the past.

In November, the stock trader extraordinaire bought calls for Nvidia. Unusual Whales, an account on X (formerly Twitter) said this was “a leveraged bet Nvidia would go up.” At the time of that post, the AI chipmaker was up 156%, earning her some $4 million. As Unusual Whales noted, that is “over TWENTY times her salary.” Members of Congress are paid $174,000 a year, plus a slew of taxpayer-paid benefits.

But were these transactions based on material, non-public information? Or was Pelosi just being like the rest of the stock market and backing the biggest name in artificial intelligence? The cynic in me would say the former, especially because of the leveraged nature of last year’s transactions. Yet if we’re feeling charitable, it’s likely a bit of both. But with Nvidia stock now down 8% from its peak, is it still a buy?

While I might not make any leverage option plays on the stock, buying shares is still a good bet. It is miles ahead of the competition in advanced AI chips and has even better ones due out soon. With companies like Amazon (NASDAQ:AMZN) waiting for the new Blackwell superchip to come out to buy, it is possible NVDA stock could pull back even more but the runway for growth for this Nancy Pelosi stock remains fully clear for takeoff.

Broadcom (AVGO)

Similarly, Pelosi was betting big on another AI chipmaker, this time Broadcom (NASDAQ:AVGO). According to her filing, the California Democrat bought 20 call options with a strike price of $800 that expire on June 20, 2025. Unusual Whales says that the transaction was worth $5 million. In just one week, she was up 13%.

Late last week, that call option was selling for $980, putting the breakeven at $1,780, or $178 per share after Broadcom’s 10-for-1 stock split. AVGO stock is currently trading at around $171 per share. However, the chipmaker is another AI stock likely heading for higher highs even if it currently sits 14.7% below its all-time high.

Best known as a chipmaker for mobile handsets that counts the biggest smartphone makers Apple (NASDAQ:AAPL) and Samsung as two of its largest customers, Broadcom more recently pivoted to providing chips for data center servers. And now its AI chips are outselling its non-AI ones. It forecasts AI chips will bring in $11 billion in revenue this year, representing 25% of total sales, up from 15% in 2023.

Look for Broadcom stock — and Pelosi’s big bet — to greatly increase in value over the next year.

Visa (V)

Pelosi wasn’t just buying, as her Tesla trade shows. In addition to selling the electric car maker, the former House speaker also sold off a portion of her holdings in Visa (NYSE:V). According to her filing, she sold 2,000 shares of the payments processor in a transaction worth between $500,000 and $1 million.

This is also not the first time Pelosi sold Visa stock. Two other large transactions in 2022 raised questions about the strength of consumer spending. Maybe it was due to stubborn inflation leading many to think the Federal Reserve wouldn’t cut interest rates from their historical high, but it’s notable that V stock is up only 5.1% this year compared to an 18% gain by the S&P 500.

Even after inflation ticked down in June to the lowest rate in three years, rallying hope for a September interest rate cut, Visa stock remained nearly flat. With consumer debt at record levels, there may not be room for more credit card debt.

Yet an investment in Visa is not just a bet on capital appreciation but also on its dividend. The payments processor has grown its payout at double-digit rates over the last five years. While a spending slowdown by consumers could temporarily dent its growth, Visa is a stock that is a long-term buy-and-hold investment.

On the date of publication, Rich Duprey did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.

Rich Duprey has written about stocks and investing for the past 20 years. His articles have appeared on Nasdaq.com, The Motley Fool, and Yahoo! Finance, and he has been referenced by U.S. and international publications, including MarketWatch, Financial Times, Forbes, Fast Company, USA Today, Milwaukee Journal Sentinel, Cheddar News, The Boston Globe, L’Express, and numerous other news outlets.