- Nvidia faces a certified class action over claims it hid more than $1 billion in crypto-linked GPU sales.
- The case covers investors between August 2017 and November 2018.
- November 2018 disclosures exposed weak gaming demand.
A US federal court has allowed a lawsuit against Nvidia and CEO Jensen Huang to move forward as a class action. The case covers investors who bought shares between August 10, 2017, and November 15, 2018.
Judge Haywood S. Gilliam Jr. ruled that investors can pursue claims as a group. The decision does not settle liability, but it pushes the case closer to trial. A case conference is set for April 21, where the court will decide the next steps.
The core claim is that Nvidia did not fully disclose how much of its gaming GPU revenue came from crypto mining during the 2017-2018 boom.
$1 Billion Revenue Gap at Center
Investors allege Nvidia hid more than $1 billion in GPU sales tied to crypto mining. According to the complaint, much of this demand flowed through GeForce gaming GPUs but was recorded under the gaming segment.
Nvidia had maintained that crypto mining was a small part of its business. The company also said mining-related sales were tracked separately and that supply remained under control.
Plaintiffs claim that crypto demand was large, volatile, and directly linked to gaming revenue. This created a mismatch between what investors were told and what was actually driving sales. The issue is not just accounting but also risk. Crypto demand can rise fast and fall faster. If that demand was a major driver, then revenue stability was weaker than presented.
Related: Nvidia Boss Claims Bitcoin Turns Wasted Energy Into Currency, Expert Reacts
2018 Disclosures Trigger Stock Drop
In August 2018, Nvidia cut guidance and flagged excess inventory as crypto demand started to fall.
The full impact became clear on November 15, 2018. CFO Colette Kress said gaming revenue missed expectations because crypto-related inventory took longer to clear. GPU prices also took longer to stabilize after the sharp drop in crypto demand.
Following that update, Nvidia stock fell about 28.5% over the next two trading sessions. Plaintiffs point to this move as proof of price impact. The court agreed there is enough evidence to question Nvidia’s earlier claims.
An internal email from a company executive also played a role. The message suggested the stock remained elevated due to earlier statements. The judge said this made it hard to conclude there was no effect on price.
The lawsuit builds on earlier regulatory action. In 2022, the SEC fined Nvidia $5.5 million for failing to disclose the impact of crypto mining on its business. That penalty already confirmed gaps in disclosure. The current case goes further by linking those gaps to investor losses and stock movement.
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