Supreme Court allows shareholder lawsuit against Nvidia

The U.S. Supreme Court has granted shareholders permission to pursue a sue against tech giant Nvidia. The company is accused of misleading investors about crypto market revenues in 2018.

Nvidia allegedly misreported revenues from crypto-mining and downplayed its reliance on the crypto industry during its rapid growth in 2017 and 2018.

According to a report by the Bank of Canada Nvidia achieved as much as $1.35 billion more revenue from chip sales to crypto-miners in 2018 than was reported in the quarterly report.

When the crypto market temporarily collapsed in September 2018, Nvidia's share price also plummeted. In November 2018, the company announced that it had not met its revenue targets. Within two days, Nvidia's share price fell more than 28 percent. CEO Jensen Huang called this setback a "crypto hangover at the time."

The recent Supreme Court decision follows a hearing in November of this year. Nvidia had argued that the lawsuit lacked sufficient detail and evidence, but the court rejected those arguments.

The shareholders' lawyer called the Supreme Court's decision a "major victory for corporate accountability." The case, ongoing since 2018, is supported by both the U.S. Department of Justice and the U.S. stock market watchdog SEC.

Since the 2018 crash, Nvidia has made an impressive recovery. The stock has become one of the best performing in recent years. By 2024, Nvidia's share price is up nearly 190 percent, thanks in part to the hype surrounding artificial intelligence, which relies heavily on Nvidia's graphics chips.