Tech giant Nvidia is facing a class action lawsuit in California with shareholders claiming that the firm hid its crypto mining revenue numbers.
According to the official statement, the chip maker “misled shareholders about how much of its gaming revenue during the 2017-2018 crypto mining boom came from GPU sales to cryptocurrency miners.”
A U.S. judge has allowed investors to move forward with their lawsuit against Nvidia as a group, clearing the way for the case to proceed as a class action.
In an order released on Wednesday, Haywood S. Gilliam Jr. emphasized that this step is procedural and does not determine whether the company’s statements were actually misleading or fraudulent.
The definition of the class in the ruling includes investors who have bought shares in Nvidia stock between August 10, 2017, and November 15, 2018. The case will be based on the impact that the alleged misstatements have had on the stock price of the company. The court will also be keen to establish whether the statements have had any impact on the stock price and have caused investors losses.
Interestingly, the case comes after previously Nvidia agreed to pay a $5.5 million penalty and accept a cease-and-desist order in 2022 for inadequate disclosures about the impact of crypto mining on its gaming GPU business, and the U.S. Supreme Court upheld a Ninth Circuit verdict in December 2024, allowing the shareholder claim to proceed.
Main complainant and demands
Shareholders have accused Nvidia and its CEO Jensen Huang of giving investors an incomplete picture of where the company’s booming gaming revenue was really coming from during the crypto surge.
They argue that while Nvidia highlighted strong demand from gamers, a large share of those graphics cards may have actually been bought by cryptocurrency miners, something investors say was not fully disclosed at the time.
The lawsuit says the market started to realize the issue in August 2018, when Nvidia cut its financial outlook during an earnings call.
Following that announcement on August 16, the company’s stock slipped by about 4.9 percent. A few months later, on November 15, 2018, Nvidia issued another warning about weaker revenue, triggering a much sharper reaction.
Shares fell roughly 28.5 percent over the next two trading days, which investors claim reflected growing concerns about how dependent the company had been on crypto-driven demand.
Investors first brought the case in 2018, and later updated their complaint in 2020, alleging Nvidia understated more than $1 billion in sales tied to cryptocurrency mining.
Nvidia, however, maintains that its long-term strategy delivered strong returns for investors and says it will respond to the allegations in court.
Next steps for the case
In the Wednesday ruling, the judge decided not to dismiss the investors’ method for estimating losses, known as the “out-of-pocket” damages model.
In simple terms, this approach tries to calculate how much money investors may have lost after buying Nvidia stock at prices they claim were artificially high.
The court also allowed a statistical analysis, called an “event study”, to stay in the case. This analysis looks at how the company’s share price reacted around key announcements to determine whether those events had a real impact on the stock.
The next step in the legal process is also already scheduled. The court will hold a case conference on April 21, 2026, at 2:00 pm Pacific Time, which will take place through a public Zoom session as the lawsuit continues to progress.