A U.S. federal court has allowed a significant class-action lawsuit against technology giant NVIDIA and its CEO Jensen Huang to proceed. The lawsuit, which covers investors who purchased NVIDIA stock between August 10, 2017, and November 15, 2018, alleges the company deliberately concealed over $1.13 billion in revenue generated from cryptocurrency mining GPU sales by improperly recording it under its gaming business segment.
Court filings reveal that during the relevant period, NVIDIA generated approximately $1.7 billion from sales of graphics processing units (GPUs) to crypto miners. Plaintiffs claim the company failed to clearly disclose that more than 65% of this crypto-related demand came from its GeForce gaming GPUs, and that crypto demand may have accounted for roughly 83% of NVIDIA's GPU growth at the time. This created a misleading impression of sustained, organic growth in its core gaming market.
The issue came to a head in late 2018. In August, NVIDIA lowered its financial outlook, citing a slowdown in crypto demand. Then, on November 15, 2018, the company admitted its gaming revenue had missed expectations due to unsold inventory following the crypto market decline. Following this disclosure, NVIDIA's stock price plummeted about 28.5% over two trading sessions. The presiding judge ruled that NVIDIA failed to prove its earlier statements did not affect the stock price, a key factor in allowing the case to proceed as a class action.
This is not NVIDIA's first regulatory encounter over this matter. In 2022, the U.S. Securities and Exchange Commission (SEC) fined the company $5.5 million for failing to adequately disclose how crypto mining was impacting its gaming revenue. The SEC stated investors should have been informed that a "meaningful portion" of GPU demand originated from miners.
A crucial hearing in the class-action lawsuit is scheduled for April 21, 2026. The outcome could result in significant penalties for NVIDIA and set a precedent for how publicly traded companies report revenue intertwined with volatile sectors like cryptocurrency. NVIDIA's stock has declined approximately 9% over the past month, trading near $178.68, as the market monitors the legal developments.
