Unexpectedly, the Supreme Court of the United States will now consider hearing Nvidia’s appeal to dismiss the fraud case. The appeal alleges that in 2017 and 2018, Nvidia misled investors about how its crypto-related sales impacted revenue growth.
The legal battle began in 2018 when the huge demand for Nvidia chips for crypto mining started, as they are known to handle complex mathematical calculations necessary for mining cryptocurrencies like Bitcoin. Subsequently, a group of shareholders in California accused Nvidia and its CEO Jensen Huang of disregarding securities laws by downplaying the role of crypto-related sales in the revenue surge during that period.
Initially dismissed by a district court last year seeking unspecified damages, the class-action lawsuit was revived by the Ninth Circuit Court of Appeals in the US. It turns out the plaintiffs claim that Huang made “false or misleading statements consciously or recklessly” according to the appellate court.
Unfazed by this ruling, Nvidia turned to the Supreme Court arguing that such actions could open doors to “abuse and speculative litigation”. And now unexpectedly, America’s highest court will hear Nvidia’s appeal and potentially dismiss the case.
Despite this ongoing legal challenge, on June 18, Nvidia’s shares surged by 3.5%, bringing the market capitalization to over $3.34 trillion. This outstanding performance placed Nvidia above industry giants Microsoft and Apple as the most valuable company in the world, underscoring investors’ belief in Nvidia’s technological advantage and future prospects.
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