The Core Allegation

During 2017-2018, cryptocurrency mining generated substantial demand for Nvidia's graphics processing units. Shareholders contend that company leadership understood crypto mining represented a major revenue driver for their gaming GPU business—potentially exceeding $1 billion—yet deliberately minimized this reliance when communicating with investors.

Why It Matters

The cryptocurrency market's collapse in late 2018 triggered a dramatic decline in Nvidia's gaming GPU sales. Stock prices fell approximately 50%. Investors claim they were caught off guard because Nvidia had previously represented gaming demand as independent from cryptocurrency activities.

The Legal Question

The Supreme Court examines whether shareholders offered adequate proof that Nvidia's executives "knew" their public statements were false at the time. This centers on "scienter"—establishing intentional misconduct rather than careless misstatement under securities regulations.

What's at Stake

This litigation may fundamentally alter how courts handle securities fraud cases involving technology firms. A decision favoring Nvidia would complicate shareholder litigation regarding forward-looking claims. A decision supporting shareholders might increase exposure for corporate leaders regarding optimistic business projections.

Key Documents in the Case

Original Complaint (2018): N.D. Cal. filing citing Securities Exchange Act violations
Motion to Dismiss Order: District court rejected case for insufficient scienter evidence
9th Circuit Reversal: Appellate panel restored the lawsuit, concluding shareholders adequately alleged executive access to contradicting information
Cert Petition: Supreme Court accepted the matter in 2024