The U.S. Supreme Court has rejected an appeal by Nvidia Corp., allowing a shareholder lawsuit over the company's crypto revenue to proceed.
The lawsuit accuses the company of misleading investors about its reliance on cryptocurrency mining revenues before a significant market crash.
Crypto lawsuit against Nvidia could go to trial in 2025
The court's ruling follows a hearing in November where the justices questioned whether the case raised legal issues substantial enough to warrant intervention by the Supreme Court.
In the lawsuit, shareholders claim that throughout 2017 and 2018, Nvidia CEO Jensen Huang concealed the extent to which record revenue growth depended on sales of its GeForce GPUs for crypto mining rather than gaming.
However, Nvidia argued that the crypto lawsuit lacked sufficient detail to advance to the evidence-gathering phase of the legal process.
According to Bloomberg, the shareholders’ legal representative called the ruling a “major victory for corporate accountability.” The lawsuit will now continue in federal district court in Oakland, California.
When the crypto market crashed in 2018, Nvidia faced significant challenges. In November of that year, the company revealed that it had missed revenue projections. This also caused Nvidia’s stock to drop more than 28% in two days. Huang attributed the drop to a “crypto hangover.”
Nvidia Stock Performance in 2024. Source: TradingView
However, despite these legal challenges, Nvidia’s stock has surged nearly 190% year-to-date. This has been driven by strong demand for its GPUs in Bitcoin mining. The company’s 4000-series GPUs have surpassed AMD in profitability rankings and gained significant market share.
GPU Profitability Ranking. Source: WhatToMine
Record growth and strategic expansion in the technology sector
In its latest financial report, Nvidia announced a 95% year-over-year increase in revenue in the third quarter, reaching $35.1 billion. Additionally, its Data Center segment saw 111% growth, and fourth-quarter revenue is projected to reach $37.5 billion.
Earlier this year, Nvidia surpassed $3 trillion in market capitalization. This surge saw the company surpass Apple and set a new milestone for the tech industry.
Additionally, Nvidia is focusing on diversifying its business beyond gaming and crypto mining. In July, the company revealed plans to provide infrastructure for next-generation humanoid robotics.
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