AI-Related Cryptocurrencies Stumble After Nvidia Earnings Miss Expectations

Major artificial intelligence-related cryptocurrencies tumbled following the release of Nvidia's second-quarter 2024 earnings, which beat estimates but failed to impress investors.

Major artificial intelligence-related cryptocurrencies took a hit on Aug. 28 following the release of Nvidia’s (NASDAQ: NVDA) second-quarter 2024 earnings, which beat estimates but failed to impress investors.

Artificial Superintelligence Alliance (FET) fell around 7.8% to $1.1663 just hours after Nvidia’s earnings announcement. Bittensor (TAO) and Render (RNDR) also slipped, down 4.5% at $295.22 and 6.8% at $5.47, respectively, according to CoinMarketCap.

The development comes as Nvidia reported $30 billion in Q2 2024 revenue, up 15% from Q1 and roughly $1.32 billion higher than previous estimates. However, it appears that this performance fell short of investors’ expectations.

“Better-than-expected isn’t cutting it for Nvidia. It seems investors expect this company to blow away expectations by at least 10%, according to Wall Street estimates,” market commentator Lisa Abramowicz noted in an Aug.28 X post following Nvidia’s announcement.

Some analysts even predicted that the company would beat the trading estimates by at least 10%. Nvidia's stock price closed the Aug. 28 trading day at $125.61, down 2.10% before the closing bell, according to Google Finance.

The stock price further slipped by another 6.89% in after-hours trading, hitting $116.95 at the time of writing.

The performance of AI crypto tokens has been closely tied to Nvidia’s performance and earnings reports in previous quarters. Some crypto market participants predicted ahead of time that AI crypto tokens would stumble after the earnings announcement.

On Aug. 23, an X user under the name “Shogun” noted that “you might catch gains being long until a day before, but I’d bet you're better off shorting for the dump after.”

Nvidia produces chips that companies use to train and deploy AI models. After releasing its Q1 earnings in May, AI crypto tokens also took a hit despite the firm’s Q1 revenue increasing by 18% from Q4 of 2023.

“The very lofty estimates were very lofty indeed,” Bloomberg's Ed Ludlow said on Aug. 28, although he believes that business is not slowing down for Nvidia.

“The story is still intact. There is no demand issue here. Basically, the cloud computing providers, the hyperscalers we call them that run datacenters, continue to spend on Nvidia’s product,” he explained.

The development comes after the market capitalization of AI and big data crypto projects and tokens surged by 79.7% over the three weeks following the “Crypto Black Monday” on Aug. 5, which saw Bitcoin ( BTC) fall below $50,000 for the first time since February.

Around that time, the total market cap of AI and big data crypto projects hit a yearly low of $18.21 billion.