The Core Allegation

In 2017-2018, cryptocurrency mining was driving massive demand for Nvidia's graphics cards. Shareholders allege that Nvidia executives knew crypto mining accounted for a significant portion of their gaming GPU sales—potentially over $1 billion—but deliberately downplayed this dependency to investors.

Why It Matters

When the crypto market crashed in late 2018, Nvidia's gaming GPU revenue plummeted. The stock dropped nearly 50%. Shareholders claim they were blindsided because Nvidia had assured them that gaming demand was organic, not crypto-dependent.

The Legal Question

The Supreme Court is now considering whether shareholders presented sufficient evidence that Nvidia executives knew their statements were false when made. This is the "scienter" requirement under securities law—proving intentional deception, not just negligence.

What's at Stake

This case could reshape how courts evaluate securities fraud claims against tech companies. A ruling for Nvidia would make it harder to sue over forward-looking statements. A ruling for shareholders could expose more executives to litigation over optimistic projections.

Key Documents in the Case

Original Complaint (2018): Filed in N.D. Cal., alleging violations of Sections 10(b) and 20(a) of the Securities Exchange Act
Motion to Dismiss Order: District court dismissed the case, finding insufficient evidence of scienter
9th Circuit Reversal: Appellate court revived the lawsuit, finding shareholders adequately alleged that executives had access to contrary data
Cert Petition: Supreme Court agreed to hear the case in 2024