Nvidia is set to face a class action lawsuit after a U.S. federal judge certified a group of investors alleging the company misled the market about its exposure to cryptocurrency mining revenue. The case covers shareholders who purchased stock between August 2017 and November 2018.
The lawsuit centers on claims that Nvidia and CEO Jensen Huang failed to adequately disclose how much demand for its gaming GPUs was driven by crypto miners. Plaintiffs allege that more than $1 billion in mining-related revenue was not properly identified, potentially distorting perceptions of the company’s core gaming business.
Investors argue that Nvidia downplayed its reliance on crypto demand while asserting strong control over supply and inventory. When crypto markets declined in 2018, excess inventory and weakening GPU sales led to a sharp adjustment in financial guidance. Nvidia’s stock fell significantly following these disclosures, supporting claims that earlier communications may have influenced investor expectations.
Regulatory scrutiny has already touched the issue. In 2022, the U.S. Securities and Exchange Commission fined Nvidia $5.5 million for inadequate disclosure related to crypto mining impacts. The current case builds on those findings, focusing on whether investors were materially misled.
The lawsuit has progressed through multiple legal stages, including dismissal and reinstatement on appeal, and will now proceed toward trial following class certification.
