Nvidia’s Record Earnings, Stock Split Shakes Up Crypto AI Market

Nvidia forecast quarterly revenue above estimates and announced a stock split, sending its shares to record levels and impacting AI-focused cryptocurrencies.

According to a May 25 reportThe Santa Clara, California-based company and pioneer in GPU-accelerated computing will implement a ten-for-one stock split starting June 7. It will also increase its quarterly dividend by 150% to 1 cent per share on a post-split basis.

A stock split divides existing shares into multiple shares to increase liquidity. Companies typically carry out stock splits when their share price rises, which can be a barrier for small investors.

Nvidia shares jumped 5.9% to $1,005 in extended trading, peaking above the $1,000 mark and adding about $140 billion in stock market value.

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

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

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

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

At the time of writing, the token is down 6.6% with a 24-hour trading volume of $827 million, according to data from CoinMarketCap.

24-hour RNDR price chart | Source: CoinMarketCap

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

Crypto trader D0C Crypto highlighted the trend, speculating 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, holders appear to be anticipating a “news sell-off” event, according to Santiment. The change suggests that the main players are positioning themselves based on Nvidia’s results and possible market reactions.

AI Solutions Platform Fetch.ai’s The FET token was trading around $2.65 at the time of Nvidia’s earnings announcement and has since fallen 2.8% to $2.45.

24-hour FET price chart | Source: CoinMarketCap

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

Industry leaders weigh in

Although AI crypto tokens have faced widespread price drops, crypto market watchers are hopeful that Nvidia’s strong performance will have a positive effect, as they claim was the case in the previous market cycle.

“Nvidia’s stock split announcement could seriously shake up the AI ​​crypto token market. Nvidia’s earnings have always been a big deal for these tokens, often causing them to rise,” Tim Zinin, founder of Escola Botânico, told crypto.news.

“With the share split, more people will be able to join, as the shares will be more accessible. This could further increase trust in technology and AI tokens. Investors are now fully convinced that artificial intelligence is here to stay,” she added.

Meanwhile, Marco Pagnini, fund manager at Moonwalk Systems, said the correlation between Nvidia shares and AI tokens has been high (above 0.75) since the beginning of the year. “TradFI has already started using crypto tokens with high correlation to the traditional market for high-end stock traders: easy access to trading, less competition.”

Pagini further noted that stock splits reduce barriers to entry for retail investors, which is one of the great features of tokenization. However, he noted that the strategy is only beneficial to equity owners, not token owners.

Ignacio Palomera, CEO of Bondex, agreed, adding that Nvidia’s earnings reports are a “rising tide that lifts all boats.”

“Previously, the fields of cryptography and machine learning were at odds. Miners sought high-powered GPUs to process transactions, while the ML community needed these GPUs to train models. Now that the AI ​​narrative is starting to take off in decentralized networks, we are seeing a merger between these two communities.”

Ignacio Palomera, CEO of Bondex

Zac Shander-Kelsey, CEO of Nodabank, added: “We have seen how the traditional sector influences cryptocurrency and this is no different. As with crypto in 2017-18, the market is still in the dark about how crypto and AI interact. Once retail gets its act together, we will see stronger correlations.”

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