Nvidia faces class-action lawsuit over crypto revenue disclosures
A federal court in California has allowed investors to file a class-action lawsuit against Nvidia and its CEO Jensen Huang. The case concerns alleged misleading statements during the 2017–2018 crypto boom.
Judge Haywood Gilliam granted class-action status on March 25, according to a court document.
This decision allows investors to act as a unified group. The lawsuit includes those who purchased Nvidia shares between August 10, 2017, and November 15, 2018. The court emphasized that this is a procedural step, not a determination of the company’s guilt. The central question is whether Nvidia’s statements influenced its stock price. The case now moves to the next stage of proceedings.
Investors accuse Nvidia of hiding crypto-related revenue
Plaintiffs claim Nvidia understated the share of revenue generated from GPU sales to crypto miners. During the boom, demand for graphics cards surged largely due to mining. However, according to investors, the company presented this as sustained demand from gamers.
The lawsuit alleges more than $1 billion in crypto-related sales were underreported. The issue surfaced after an earnings report on August 16, 2018. Nvidia shares dropped 4.9% following lowered guidance. A second decline occurred on November 15, 2018, when the stock fell 28.5% over two days. These events intensified investor concerns about disclosure transparency.
Regulators have already fined Nvidia for similar violations
In 2022, Nvidia faced penalties for similar issues. The company agreed to pay a $5.5 million fine and was ordered to cease violations. Regulators cited insufficient disclosure of the role of crypto mining in its revenue. Despite this, the legal case continued.
In December 2024, the U.S. Supreme Court declined to block the lawsuit, allowing it to proceed. The current case is therefore part of a broader regulatory history. Pressure on the company has persisted for several years.
Case focuses on the impact of statements on stock price
A key element of the case will be analyzing how Nvidia’s statements affected the market. The court approved the use of the “out-of-pocket” damages model and the event study methodology. This approach evaluates how specific events influenced stock price movements.
The declines of 4.9% and 28.5% are being examined as potential consequences of information disclosure. Nvidia stated that investors ultimately made profits during that period. The company plans to defend itself in court. The next hearing is scheduled for April 21, 2026. The outcome could influence disclosure standards across the tech industry.
Recently we wrote that Nvidia fourth-quarter earnings report was not just a strong release but a test of market sentiment. The company once again exceeded analyst expectations and demonstrated a scale that only a few years ago seemed impossible for a chipmaker. However, investor reaction was restrained: the stock gained only a few percentage points. What does this mean for the company itself and for the industry as a whole?
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