Nvidia is facing a shareholder lawsuit that could shake things up, as the U.S. Supreme Court has decided to let the case proceed.
The lawsuit claims that Nvidia misled investors about its cryptocurrency revenue before the market crash in 2018.
Smoke and mirror
The Supreme Court’s ruling came after Nvidia tried to appeal the decision, arguing that the lawsuit didn’t have enough details to move forward, but the court disagreed, allowing shareholders to pursue their claims.
They allege that CEO Jensen Huang downplayed how much the company’s skyrocketing profits were tied to sales of its GeForce GPUs for crypto mining rather than gaming.
After the crypto market took a nosedive in 2018, Nvidia revealed it had missed revenue targets, leading to a dramatic 28% drop in its stock price over just two days. Huang famously referred to this downturn as a crypto hangover.
Fall and rise
This legal battle will now head to a federal district court in Oakland, California.
The attorney representing the shareholders called this decision a major victory for corporate accountability, which sounds like a win for investors who feel misled.
Despite these challenges, Nvidia has bounced back remarkably since the crypto crash.
This year alone, its stock has surged nearly 190%, thanks to strong demand for GPUs used in mining, gaming, and artificial intelligence applications.
The company recently announced a 95% increase in revenue for Q3, reaching $35.1 billion, with its Data Center segment showing a 111% year-over-year growth. They’re even forecasting Q4 revenues of $37.5 billion.
No rest
Earlier this year, Nvidia hit a major milestone by surpassing a $3 trillion market cap, and while Nvidia continues to thrive in gaming and crypto markets, it’s also diversifying its focus.
In July, they revealed plans to develop infrastructure for advanced humanoid robotics, wanting to reduce their dependence on the unpredictable world of crypto mining.
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