Major artificial intelligence-related cryptocurrencies tumbled following the release of Nvidia’s second-quarter 2024 earnings, which beat estimates but failed to impress investors.
Artificial Superintelligence Alliance (FET) fell approximately 7.8% to $1.1663 just hours after Nvidia’s earnings release. Bittensor (TAO) fell 4.5% to $295.22, and Render (RNDR) fell 6.8% to $5.47, according to CoinMarketCap data.
Despite Nvidia’s $30 billion revenue in Q2 2024, a 15% increase from Q1 and around $1.32 billion above previous estimates, it seems it wasn’t enough.
“Better-than-expected doesn’t cut it for Nvidia. Evidently, investors expect this company to blow away expectations,” market commentator Lisa Abramowicz wrote in an Aug. 28 X post following Nvidia’s announcement.
Some analysts even predicted that it would be Wall Street estimates by at least 10%.
Nvidia’s (NVDA’s) stock price closed the Aug. 28 trading day at $125.61 and has since fallen a further 6.89% in after-hours trading to $116.95, according to Google Finance data.
Nvidia’s stock price fell 2.10% before the trading day closed. Source: Google Finance
The performance of AI crypto tokens has been closely linked to Nvidia’s performance and earnings reports in previous quarters.
Some crypto market participants had predicted ahead of time that AI crypto tokens would stumble after the earnings release.
On Aug. 23, one X user by the name “Shogun” wrote “you might catch gains being long until a day before, but I’d bet you’re better off shorting for the dump after.”
Nvidia produces chips companies use to train and deploy AI models. After releasing its Q1 earnings in May, AI crypto tokens similarly tumbled despite its Q1 revenue jumping 18% from Q4 2023.
“The very lofty estimates were very lofty indeed,” Bloomberg’s Ed Ludlow said on Aug. 28, though he believes business is not slowing down for Nvidia.
“The story is still intact. There is no demand issue here. Basically, the cloud computing providers, the hyperscalers we call them, that run datacenters, continue to spend on Nvidia’s product,” he explained.
It comes after the market capitalization of AI and big data crypto projects and tokens surged by 79.7% over the three weeks following the “Crypto Black Monday” on Aug. 5, which saw Bitcoin (BTC) fall below $50,000 for the first time since February.
Around the time, the total market cap of AI and big data crypto projects recorded a yearly low of $18.21 billion.
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