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29/08/24
98
AI Crypto Bloodbath: Nvidia’s Earnings Disappointment Triggers Major Declines
Following Nvidia’s second-quarter earnings report for 2024, major cryptocurrencies associated with artificial intelligence have experienced significant declines. Despite Nvidia surpassing revenue estimates with a reported $30 billion — a 15% increase from the previous quarter — investors appeared underwhelmed, leading to declines in various AI tokens. For instance, the Artificial Superintelligence Alliance (FET) dropped about 7.8% to $1.1663, while Bittensor (TAO) and Render (RNDR) saw respective declines of 4.5% to $295.22 and 6.8% to $5.47.
The disappointment in Nvidia’s performance seemed rooted in heightened investor expectations. Market analysts noted that even strong financial results from the tech giant were perceived as insufficient. The stock price of Nvidia closed at $125.61 on August 28, only to drop an additional 6.89% in after-hours trading, landing at $116.95. This reaction highlights the strong correlation between AI cryptocurrency valuations and Nvidia’s earnings trajectory.
Historically, the performance of AI-related cryptocurrencies has fluctuated in tandem with Nvidia’s results. Observers had predicted potential volatility following the earnings announcement, with some market participants suggesting a shorting strategy in anticipation of a price drop. This trend was mirrored after Nvidia’s Q1 earnings in May, when AI tokens also fell despite robust revenue growth.
Notably, the market capitalization of AI and big data cryptocurrency projects surged by nearly 80% following a market downturn earlier in August. The total market cap, which reached a low of $18.21 billion after a substantial drop in Bitcoin prices, illustrates the volatile nature of these digital assets. Despite short-term setbacks, analysts affirm that the demand for Nvidia’s products, particularly among major cloud service providers, remains strong and is unlikely to diminish in the near future.
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