Key Points

  • Federal Judge Haywood Gilliam certified an investor class action against Nvidia and CEO Jensen Huang on March 25
  • Plaintiffs allege Nvidia concealed more than $1 billion in GPU sales to cryptocurrency miners while attributing revenue growth to gaming customers between 2017 and 2018
  • The SEC previously imposed a $5.5 million penalty on Nvidia in 2022 for inadequate disclosure of crypto mining’s influence on gaming segment revenue
  • Eligible class members include those who purchased NVDA shares from August 10, 2017 through November 15, 2018
  • A case management conference has been scheduled for April 21 via Zoom; shares traded at $174.03, declining 2.5%

Nvidia (NVDA) was trading at $174.03, down 2.50% at the time of writing.


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NVIDIA Corporation, NVDA

Shares declined following a California federal judge’s decision to advance the prolonged crypto revenue litigation toward trial.

Allegations at the Heart of the Lawsuit

The central allegation centers on transparency: Nvidia attributed surging gaming GPU revenue to increased gamer purchases. Plaintiffs contend this narrative omitted critical information.

During the 2017 cryptocurrency boom, Ethereum miners purchased GeForce GPUs in substantial quantities. This mining demand allegedly represented a significant portion of revenue Nvidia classified under its “gaming” segment.

Quarterly revenue climbed 52% followed by 25% year-over-year during these reporting periods. Investors claim they remained unaware of cryptocurrency’s contribution to these figures.

When Bitcoin collapsed in 2018 and mining profitability evaporated, GPU demand plummeted. Gaming revenue declined sharply, revealing what plaintiffs describe as the crypto-dependent nature of the prior growth surge.

Nvidia’s Q4 FY2019 earnings call intensified scrutiny. Company executives explicitly connected the revenue decline to weakening crypto mining activity — a statement that contradicted previous characterizations of the growth drivers.

Prior SEC Enforcement Action

Regulatory authorities addressed these concerns separately. In May 2022, Nvidia settled with the SEC, paying a $5.5 million penalty after investigators determined the company inadequately disclosed cryptocurrency mining’s substantial effect on gaming GPU revenue during fiscal Q2 and Q3 2018.

The enforcement division stated that Nvidia’s disclosure deficiencies prevented investors from accessing material information necessary for informed business evaluation.

Nvidia resolved the matter through settlement without admitting or denying the allegations — a framework that protected its legal position while essentially acknowledging the underlying facts.

The civil litigation continues from where regulatory enforcement concluded. The question has shifted from whether disclosure failures occurred to who bears financial responsibility.

Plaintiffs further assert that Nvidia personnel actively monitored cryptocurrency market movements and connected them with GPU sales data in real time throughout those quarters. This internal awareness, they argue, renders executive statements about gaming demand intentionally deceptive beyond mere omission.

On March 25, Judge Haywood Gilliam granted class certification — encompassing all investors who acquired NVDA shares between August 10, 2017 and November 15, 2018. This ruling addresses procedural requirements and does not adjudicate the fraud allegations themselves.

A case management conference will convene April 21 through a public Zoom webinar.

Nvidia responded: “Investors who purchased NVIDIA in the 2017-2018 timeframe have done incredibly well, as our corporate strategy unfolded as we consistently predicted. We will address the complaint in court.”