Nvidia and CEO Jensen Huang Hit with Certified Class Action Lawsuit for Alleged Misstatements on $1B Crypto Revenue
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Mar 26 2026
0mins
Source: stocktwits
Class Action Lawsuit Against Nvidia: A U.S. district court has certified a class action lawsuit against Nvidia and CEO Jensen Huang, alleging that the company understated its gaming revenue linked to cryptocurrency mining between 2017 and 2019, which misled investors about its financial health.
Impact on Nvidia's Stock: The lawsuit claims that Nvidia concealed over $1 billion in GPU sales related to cryptocurrency mining, contributing to a significant decline in its stock price, which dropped by about 28.5% following disclosures about its exposure to the crypto market.
Legal Proceedings and Developments: The case, initially filed in 2018 and dismissed in 2021, was revived on appeal and is now set to proceed to trial after a federal judge granted class certification, allowing investors to collectively pursue claims against Nvidia.
Investor Sentiment and Market Reaction: Following the lawsuit's developments, Nvidia's stock has experienced volatility, with retail sentiment declining amid broader market weaknesses, reflecting concerns over the company's performance and its exposure to the cryptocurrency market.
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Analyst Views on NVDA
Wall Street analysts forecast NVDA stock price to rise
41 Analyst Rating
39 Buy
1 Hold
1 Sell
Strong Buy
Current: 207.410
Low
200.00
Averages
264.97
High
352.00
Current: 207.410
Low
200.00
Averages
264.97
High
352.00
About NVDA
NVIDIA Corporation is an artificial intelligence (AI) infrastructure company. The Company is engaged in accelerated computing to help solve the challenging computational problems. Its segments include Compute & Networking and Graphics. The Compute & Networking segment includes its Data Center accelerated computing and networking platforms and AI solutions and software, and automotive platforms and autonomous and electric vehicle solutions, including software. The Graphics segment includes GeForce GPUs for gaming and personal computers (PCs), and Quadro/NVIDIA RTX GPUs for enterprise workstation graphics. Its technology stack includes the foundational NVIDIA CUDA development platform that runs on all NVIDIA GPUs, as well as hundreds of domain-specific software libraries, frameworks, algorithms, software development kits (SDKs), and application programming interfaces (APIs). Its platforms address four markets, which include Data Center, Gaming, Professional Visualization, and Automotive.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Data Center Growth: The company commands an 85% to 92% share of the data center GPU market, with global spending expected to reach $7 trillion by 2030, further solidifying Nvidia's leadership position in this booming sector.
- Optimistic Future Outlook: CEO Jensen Huang stated that Nvidia has visibility into $500 billion in sales over the next two years, with expectations to exceed $1 trillion in revenue by 2027, indicating strong growth potential ahead.
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- Structural Differences: As an ETN issued by Deutsche Bank, DGP tracks an index calculation rather than holding physical futures, thus avoiding investor-level rolling costs, while UGL must roll futures contracts, which affects its performance due to contango or backwardation.
- Tax Implications: UGL holders receive a Schedule K-1 tax form, adding annual complexity, while DGP offers a 1099 form, simplifying tax handling and appealing to a broader investor base.
- Liquidity Considerations: UGL boasts larger asset size and tighter spreads, whereas DGP's smaller footprint can lead to wider bid-ask spreads during volatility, and the ETN carries closure or early redemption risks that UGL does not face.
See More
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- Market Reaction Analysis: Such large outflows may lead to increased price volatility for the ETF, prompting investors to monitor shifts in market sentiment and their potential effects on overall investment portfolios, particularly regarding large-cap stocks.
- Investor Confidence Erosion: The outflow phenomenon reflects growing concerns among investors about market prospects, potentially leading others to reassess their investment strategies in similar ETFs, thereby affecting overall market liquidity.
- Industry Trend Observation: As the outflow trend intensifies, the market may witness a reallocation towards other ETFs, with investors likely shifting to more defensive investment choices to navigate market uncertainties.
See More
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- Portfolio Performance: Among 34 stocks, 19 have risen since the May meeting, with Arm's stock soaring 38.2% driven by strong AI demand and the release of a new Nvidia chip, highlighting the potential for a rebound in tech stocks.
- Bank Stocks Recovery: Wells Fargo's shares increased by 13.9%, reflecting the financial sector's status as the best-performing group in the S&P 500, although it remains down nearly 7% year-to-date, suggesting a cautious recovery amid potential earnings volatility.
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See More
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- Manufacturing Investment: Nvidia's $2 billion partnership with Coherent to expand a Texas facility is expected to create around 1,000 new jobs, including 550 advanced manufacturing and engineering positions, demonstrating the company's strong commitment to revitalizing U.S. manufacturing.
- Energy Production Challenges: Jensen Huang highlighted that the U.S. is significantly lagging in energy production, stressing that expanding energy supply is critical for AI development, especially given the enormous electricity demands of data centers, which may lead to future data centers generating their own power.
- Social Norms Transformation: Huang advocates for broader public adoption of AI technology, arguing that it can make complex computing tasks more accessible, pushing society to adapt to new technologies akin to the automobile's introduction, emphasizing the need for new rules and safeguards.
- National Security Priority: Regarding regulation, Huang stressed that national security should always be the top concern in technology development, calling for specificity in risk assessment when establishing export control policies, reflecting a serious approach to AI oversight.
See More
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- Surge in Capital Expenditure: Oracle anticipates capital expenditures of $70 billion for fiscal 2027, with total spending projected between $90 billion and $95 billion, significantly exceeding the $56 billion spent in fiscal 2026, indicating a strong commitment to AI infrastructure investment that could drive rapid market growth.
- Robust GPU Demand: Oracle's latest earnings report reveals a global GPU utilization rate of 97.5% in data centers, highlighting sustained demand for GPUs in AI workloads, which bodes well for Nvidia, reinforcing its dominant market position.
- Optimistic Market Outlook: According to Gartner, global AI infrastructure spending is expected to soar to $1.36 trillion in 2023 and reach $1.75 trillion by 2027, indicating a sustained investment boom in the AI sector, from which Nvidia is poised to benefit significantly.
- Earnings Growth Projections: Nvidia is forecasted to achieve an 88% earnings growth in fiscal 2027, far surpassing the S&P 500's 23% growth, with an expected earnings per share of $12.73 for fiscal 2028, suggesting a potential stock price increase to $318 if valued at 25 times earnings, representing a 50% upside.
See More
