AI Crypto Markets React to Nvidia’s Earnings, Good But Not Quite Enough

Cryptocurrencies linked to artificial intelligence experienced significant drops shortly after Nvidia unveiled its earnings for the second quarter of 2024. Although Nvidia’s earnings exceeded forecasts, the figures did not meet investor expectations.

Following the earnings announcement, the value of Artificial Superintelligence Alliance (FET) decreased by 7.8% to $1.16, Bittensor (TAO) dropped 4.5% to $295.22, and Render (RNDR) declined 6.8% to $5.47, as per CoinMarketCap.

Nvidia reported a revenue of $30 billion for Q2 2024, marking a 15% increase from Q1 and surpassing expectations by about $1.32 billion. However, this did not satisfy investor aspirations for more impressive results.

Lisa Abramowicz, a market analyst, commented on X on August 28, saying, “Nvidia’s results, though better than expected, are not sufficient for investors who anticipate the company to exceed forecasts significantly.”

There were predictions from some market analysts that Nvidia would surpass Wall Street predictions by a wide margin.

After the earnings were reported, Nvidia’s share price ended at $125.61 on August 28 and subsequently dropped by 6.89% in after-hours trading to $116.95, as noted by Google Finance.

The fluctuations in AI-focused cryptocurrency values have historically paralleled Nvidia’s financial performance.

Prior to the earnings announcement, there was speculation among cryptocurrency enthusiasts that AI-related tokens would suffer. On August 23, a user named Shogun on X suggested, “Holding long until just before the release might yield gains, but betting on a decline post-earnings could be more profitable.”

Nvidia is renowned for producing chips utilized in training and deploying AI systems. Following its Q1 earnings release in May, there was a similar downturn in AI cryptocurrencies, despite a notable 18% increase in revenue from Q4 2023.

Despite the underwhelming investor response, Bloomberg’s Ed Ludlow on August 28 maintained a positive outlook, “The high expectations were indeed lofty, but the business isn’t slowing. There’s no issue with demand. The major cloud computing providers continue to invest heavily in Nvidia’s offerings.”

This follows a substantial 79.7% increase in the market capitalization of AI and big data crypto projects in the three weeks after August 5, known as “Crypto Black Monday,” when Bitcoin’s value dropped below $50,000 for the first time since February.

At that time, the cumulative market cap of these AI and big data crypto projects reached a yearly low of $18.21 billion.

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