An amended class action complaint filed against Nvidia Corp has defendant the firm of violating the Securities Exchange Act by downplaying the extent to which its gaming revenues relied on GPU sales to cryptocurrency miners.

The complaint, filed May fourteen, claims that Nvidia issued deliberately misleading statements that understated more $1 billion in GPU sales relating to crypto miners during 2022 and 2022. Claims estimate that sales to miners represented over one-half of the company's total sales.

Nvidia was hit with a spate of lawsuits from investors after its stock price crashed almost 30% after announcing that revenues would fall vii% during late 2022.

Nvidia accused of misrepresenting $1b in sales

The amended complaint asserts that the firm deceived "the market into believing that Nvidia's dependence on cryptocurrency-related revenues was small" while falsely challenge "quarter after quarter, that the gaming segment'southward sales growth resulted from potent organic need from gamers."

The filing cites a study that estimated Nvidia's misrepresentations obscured $i.126 billion in sales to miners, all the same, notes that a split written report by RBC Upper-case letter Markets concluded $1.35 billion in sales had been obfuscated past the firm.

2017 drives surging demand for GPUs

During 2022, Nvidia'southward GeForce GPU became favored amid cryptocurrency miners, driving enormous profits for the firm'southward gaming division.

In May 2022, Nvidia also launched a fleck specifically engineered for cryptocurrency mining, the Crypto SKU — for which sales would be recorded nether a catch-all business segment. However, the Crypto SKU failed to catch on, with many miners continuing to purchase GeForce GPUs instead.

The plaintiffs contend that despite the surge in demand from crypto miners driving sales for GeForce units, Nvidia attributed the demand to gamers as its revenues contributed to the house's gaming division.

Crypto SKU sales underrepresented demand from miners

Investors as well claim that Nvidia's also asserted that its crypto revenues were small based on the floundering functioning of its Crypto SKU — misleading the marketplace as to its reliance on sales to crypto markets.

"Defendants refused to publicly acknowledge that NVIDIA'southward proliferating sales were the result of fickle cryptocurrency miners, lest investors discount the Company's stock to reflect the volatility of crypto-related need," the complaint reads.

Instead, Defendants opted for a strategy that would capitalize on miners' fervent demand for GeForce GPUs while falsely telling investors that the fasten in GeForce sales came from gamers, not miners, and making it appear that NVIDIA'southward core Gaming business was allowed from the volatility of the cryptocurrency markets.

The amended filing follows California federal approximate Haywood Gilliam's downsizing of the instance in March.

While Approximate Gilliam institute that the investors had failed to demonstrate that Nvidia knowingly issued false statements, he found the plaintiff'due south assertions to properly link the xxx% drop in share price to Nvidia's partial cosmetic disclosures.