The U.S. Supreme Court has signaled its inclination to uphold a class-action lawsuit against Nvidia Corp NVDA for allegedly providing misleading information to investors about its reliance on cryptocurrency mining.
What Happened: The Supreme Court heard arguments on Wednesday regarding Nvidia’s appeal to dismiss a lawsuit accusing the company of misrepresenting its dependence on selling computer chips for cryptocurrency mining, reported the Associated Press.
The lawsuit, initiated by a Swedish investment management firm in 2018, persisted despite Nvidia’s appeal of a lower-court ruling. The case is one of two high-profile class-action lawsuits against tech companies currently under the Supreme Court’s scrutiny.
Following a downturn in cryptocurrency profitability, Nvidia’s revenues fell short of projections, leading to a 28% decline in the company’s stock price. In 2022, Nvidia paid a $5.5 million fine to the Securities and Exchange Commission for failing to disclose that cryptomining was a significant revenue source from the sale of graphics processing units marketed for gaming.
Despite the lawsuit, Nvidia has maintained its position as a leading company in the artificial intelligence sector. The company’s chipmaking dominance has solidified its status as a key player in the AI boom.
Why It Matters: Nvidia has been making significant strides in the AI space. The company recently partnered with SoftBank to build Japan’s most powerful AI supercomputer, marking a crucial step in Japan’s global AI dominance.
Analysts have also predicted a major surge in Nvidia’s stock following its third-quarter performance, driven by strong demand for its Blackwell GPUs. Despite this, the ongoing lawsuit could potentially impact the company’s financial standing.
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This story was generated using Benzinga Neuro and edited by Kaustubh Bagalkote
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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