Nvidia Tanked $250B in Market Cap and Outperforms Poorly as AI Coins Suffer

• Nvidia's 122% revenue growth in Q2 2024 led to an 8% drop in market cap (around $250B in losses).
• This impacted the AI crypto market, sending many large AI coins shaking in their boots, with $FET losing 7.8%, $RNDR 6.8%, and $TAO 4.5% after the earnings call ended.
• Nvidia remains one of the largest AI chip makers on the market, and it will likely recover (alongside AI coins) once shareholders ground their expectations.

Nvidia hasless-than-stellar (quite literally) Q2 earnings (122% revenue growth), falling short of investors' sky-high expectations.

Around $250B vanished from its market cap minutes after the earnings call was over.

Why did this happen? And how much did this impact AI cryptocurrencies? That's what we'll discuss and how unrealistic expectations might corner the chip maker.

Nvidia Reports 122% Revenue Growth Yet Still Suffers

When a company more than doubles its quarterly growth, that's typically a reason for celebration. Not for Nvidia, though - its 122% Q2 revenue growth tanked its market cap by 8% ($250B).

Essentially, the company outperformed poorly, according to the market reaction. Investors and shareholders had unrealistic expectations, which backfired.

Ryan Detrick (chief market strategist at Carson Group) claimed that, while Nvidia maintains its market dominance, it appears the bar was just set a tad too high this earnings season.'

That's not a surprise, as the company had tripled its revenue during the last three quarters, establishing an outperformance pattern. Matt Britzman, senior equity analyst at Hargreaves Lansdown, emphasizes the tricky situation Nvidia is in.

It's less about just beating estimates now, markets expect them to be shattered.Matt Britzman, senior equity analyst at Hargreaves Lansdown

The new Blackwell GPU has also set a new standard for the chip maker, with Nvidia saying in a blog post that the new GPUs have quadrupled the performance of their current top GPU (the H100).

How Does Nvidia's Bad Outperformance' Issue Affecting AI Crypto?

AI meme coins like Render ($RNDR), Artificial Superintelligence Alliance ($FET), and Bittensor ($TAO) suffered immediate losses after Nvidia earnings call in June:

• $FET lost 7.8%, falling to $1.16. It's down by 6.01% in the last 24 hours.
• $RNDR lost 6.8%, dumping to $5.47, and it's down by 6.07% in the last 24 hours.
• $TAO fell by 4.5% to $295.22. It's down by 6.39% in the last 24 hours.

The total AI crypto market cap is also down by 1.5% in the last 24 hours. Even $NEAR, the biggest AI coin, is down by 22.41% in the last month. Its market cap has fallen by 2.22%, and its 24-hour market volume dumped by 20.13%.

The writing is on the wall for other big AI coins (like $ICP), though the situation might fix itself with Nvidia's next earnings call in Q3.

Once investors and shareholders ground their expectations to more realistic standards, the company should make a full recovery, alongside the AI crypto market.

What's the Likeliest Path Forward for Nvidia?

First, some context - Nvidia became the poster child of AI technology after breaking numerous milestones in implementing AI in its chips.

The company's stock shot up to $3T following the AI boom. It outpaced every expectation, achieving spectacular growth. But even Nvidia couldn't catch lightning in a bottle constantly.

However, Alvin Nguyen (senior Forrester analyst) remains confident in Nvidia's solid foundation. Even though AI seems to be a slippery slope, the chip maker is still selling market-leading products.

Unless rivals develop better products, Nvidia's market standing will be very difficult to shake. Especially if shareholders remain grounded.

ReferencesClick to expand and view sources

• Nvidia fails to impress growth-hungry investors, shares fall (Yahoo Finance)
• AI chip giant Nvidia shares fall despite record sales (BBC)
• Artificial Superintelligence Alliance Price Performance (CoinMarketCap)
• Render Price Performance (CoinMarketCap)
• Bittensor Price Performance (CoinMarketCap)
• NEAR Protocol Price Performance (CoinMarketCap)

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