Nvidia Results Cause AI Cryptocurrencies to Falter

The impact of American chipmaker Nvidia’s earnings report isn’t limited to the stock market. Even cryptocurrencies that are geared towards artificial intelligence (AI) faltered on the charts, following the report.

Key Takeaways  

➔ Nvidia’s revenue estimate wasn’t up to the expectation of the AI-focused crypto players.

➔ Leading AI-driven crypto tokens fell 5%-7% following the release of the report.  

On 28 August, Nvidia (NVDA) reported its financial results for the second quarter of the year. Despite posting exceptional earnings, the company's revenue estimate for the current quarter disappointed the AI-driven crypto market.

The California-based chipmaker reported a record quarterly revenue of $30 billion, a surge of 122% year-over-year (YOY). The results beat all the estimates forecasted by experts. In fact, it is the fourth quarter in a row that Nvidia has reported triple-digit revenue growth.

The tech giant has skyrocketed 180% over the last 12 months. It also announced that it is planning to repurchase $50 billion of its shares. The success of Nvidia is the stuff of legend. We can attribute its extraordinary success to the AI boom of the last few years. The tech giant has incorporated AI at an extensive level, becoming the world’s second largest public company in the process.

The company said it expected a revenue of $32.5 billion during the current quarter. But the market was hardly impressed with the company’s estimate. It expected the chipmaker to earn $31.7 billion. Thus began a drop in the performance of AI-focused crypto currencies that imitated the stock performance of Nvidia.

First, NVDA stock fell as much as 9% after-hours on 28th August. Then, the crypto tokens also began to falter.

• Artificial Superintelligence Alliance (FET) dropped around 7.8% to $1.16.

• Bittensor (TAO) fell 4.5% to $295.22.

• Render (RENDER) fell 6.8% to $5.47.

Earlier, these tokens surged as much as 70% within a week ahead of the day when Nvidia published its earnings report. However, the drop was not surprising because market commentators had predicted that AI-focused cryptocurrencies would indeed falter once Nvidia publishes its earnings report.

Recommended Read: Nvidia’s Earnings Beat Estimates, Yet Drag Down Tech Stocks Globally

Nonetheless, the AI industry is only expected to expand further over the next few years. PwC estimated in a report that AI could contribute up to $15.7 trillion to the global economy in 2030.

Increased productivity and consumption-side effects are likely to contribute $6.6 trillion and $9.1 trillion respectively. By 2030, AI will give a boost of 26% to China’s gross domestic product (GDP) and that of 14.5% to North America’s GDP. The figure is equivalent to $10.7 trillion.

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