Nvidia’s Record Earnings and Stock Split Shake AI Cryptocurrency Market

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

According to a May 25th relationshipThe Santa Clara, California-based company, a 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 dividend. basic.

A stock split splits existing shares into multiple shares to increase liquidity. Companies typically carry out stock splits when their stock price becomes high, which can be a hurdle for small investors.

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

The major chipmaker expects fiscal second-quarter revenue to be $28 billion, plus or minus 2%. According to LSEG data, analysts expected revenue of $26.66 billion.

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

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

Render (RNDR), a decentralized graphics processing unit rendering platform on Ethereum, fell 12% within five hours of the earnings report, falling to $10.48.

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

RNDR 24 Hour Price Chart | Source: CoinMarketCap

Despite this initial decline, historical data suggests recovery potential. During Nvidia’s fourth quarter earnings event in February, RNDR increased 38% in 48 hours.

Cryptocurrency 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 “sell the news” event, according to Santiment. The move suggests that major players are positioning themselves based on Nvidia’s results and potential market reactions.

AI solutions platform Fetch.ai 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 saw declines of between 4% and 6%, respectively.

Industry leaders weigh in

Even though AI crypto tokens have suffered price drops across the board, cryptocurrency market observers are hoping that Nvidia’s strong performance will have a positive effect, as they claim has happened in previous market cycle.

“Nvidia’s stock split announcement could seriously shake up the AI ​​crypto token market. Nvidia earnings have always been a big issue for these tokens, often driving them higher,” Tim Zinin, founder of Botanica School, told crypto.news.

“With the stock split, more people may take action as the shares will be cheaper. This could further increase trust in AI technology and tokens. Investors are now fully convinced that AI is here to stay,” she added.

Meanwhile, Marco Pagnini, fund manager at Moonwalk Systems, said that the correlation between Nvidia shares and AI tokens is 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 leading stock traders – easy access to trading, less competition.”

Pagnini also 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 stock owners, not token owners.

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

“Previously, the cryptocurrency and machine learning industries were at odds with each other. Miners were looking for high-powered GPUs for transaction processing while the ML community needed such GPUs for training models. Now that the AI ​​narrative is starting to take off on decentralized networks, we are seeing a merger between these two communities.”

Ignacio Palomera, CEO of Bondex

Zac Shander-Kelsey, CEO of Nodabank, added: “We’ve seen how the traditional industry influences cryptocurrency, and this is no different. Just like with cryptocurrencies in 2017-18, the market still doesn’t know how cryptocurrencies and AI interact. Once retail takes over, we will see stronger correlations.”

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