Nvidia’s record earnings and stock split shake up AI crypto market 

Nvidia beats quarterly revenue estimates and announces stock split; While it increased its shares to record levels, it also affected artificial intelligence-focused cryptocurrencies.

The Santa Clara, California-based company and pioneer of GPU-accelerated computing will implement a ten-for-one stock split starting June 7, according to a May 25 report. It will also increase its quarterly dividend by 150 percent to 1 percent. post-split sharing.

A stock split divides existing shares into multiple shares to increase liquidity. Companies often conduct stock splits when share prices rise, which can be a hurdle for small investors.

Nvidia shares rose 5.9% to $1,005 in extended trading, moving above $1,000 and adding nearly $140 billion to its stock market value.

BREAKING: Nvidia shares, $NVDArose towards $1,000 per share following the reporting of earnings and a 10:1 stock split.

The company generated record quarterly revenue of $26 billion on EPS of $6.12, both above expectations.

This represents a 260% year-over-year increase in revenue for the 3rd largest company… pic.twitter.com/FcJElzKjCs

— Kobeissi Letter (@KobeissiLetter) May 22, 2024

The leading chipmaker forecasts fiscal second-quarter revenue of $28 billion, plus or minus 2%. Analysts were expecting revenue of $26.66 billion, according to LSEG data.

First-quarter revenue rose 262% year over year to $26.04 billion, beating estimates of $24.65 billion. Net income increased 628% to $14.88 billion.

Contrary to crypto investors’ expectations, Nvidia’s strong gains did not immediately boost AI-related cryptocurrency tokens.

Render (RNDR), a decentralized graphics processing unit rendering platform on Ethereum, fell 12% to $10.48 in the five hours after its earnings report.

According to CoinMarketCap data, at the time of writing, the token was at $827 million with 24-hour trading volume, down 6.6%.

RNDR 24-hour price chart | Source: CoinMarketCap

Despite this initial decline, historical data suggests there is potential for a recovery. During Nvidia’s Q4 earnings event in February, RNDR rose 38% in 48 hours.

Crypto trader D0C Crypto highlighted this trend by predicting that RNDR could rise above $15 from its current price if history repeats itself.

Adding to the speculation, a known whale wallet transferred approximately $52.1 million worth of RNDR tokens to an unknown wallet; According to Santiment, the owners appear to be expecting a “tail selling” event. This move shows that major players are positioning themselves for Nvidia’s results and potential market reactions.

FET, the token of AI solutions platform Fetch.ai, was trading around $2.65 at the time of Nvidia’s earnings call and has since fallen 2.8% to $2.45.

FET 24-hour price chart | Source: CoinMarketCap

Meanwhile, other popular AI tokens such as The Graph (GRT) and SingularityNet (AGIX) also recorded declines ranging from 4% to 6% respectively.

Industry leaders weigh in

Although AI crypto tokens are facing price declines in general, crypto market watchers are hopeful that Nvidia’s strong performance will have a positive impact, as they claimed in the previous market cycle.

“Nvidia’s stock split announcement could seriously shake up the AI ​​crypto token market. Tim Zinin, founder of Botanica School, told crypto.news that Nvidia’s gains are always significant for these tokens and often cause them to rise.

“With the split, more people can participate in these shares as they will be more affordable. This can further increase confidence in the technology and AI tokens. Investors are now fully convinced that AI is here to stay,” he added.

Meanwhile, Moonwalk Systems fund manager Marco Pagnini said that the correlation between Nvidia shares and AI tokens has been high (over 0.75) since the beginning of the year. “TradFI has introduced crypto tokens for front-line equity investors with high correlation to the traditional market: easy trading access, less competition.”

Pagini also noted that stock splits lower barriers to entry for retail investors, which is one of the biggest features of tokenization. However, he noted that the strategy only benefits equity holders, not token holders.

Bondex CEO Ignacio Palomera agrees, adding that Nvidia’s earnings reports are “a rising tide that will lift all boats.”

“The crypto and machine learning camps have been at odds with each other before. While miners were looking for high-power GPUs to process transactions, the ML community needed these GPUs for training models. “We are now seeing a convergence between these two communities as the AI ​​narrative begins to spread across decentralized networks.”

Ignacio Palomera, CEO of Bondex

Nodabank CEO Zac Shander-Kelsey added: “We’ve seen how the traditional sector has impacted cryptocurrency and this is no different. Just like with crypto in 2017-18, the market still doesn’t know how crypto and AI interact. As retail begins to catch on “We will see stronger correlations.”