Despite Nvidia's strong Q2 2024 earnings surpassing Wall Street expectations, AI-related cryptocurrencies, including FET, TAO, and RNDR, faced a significant downturn as investors remained unimpressed.
AI-related cryptocurrencies faced a sharp decline following Nvidia’s release of its Q2 2024 earnings, which, while exceeding Wall Street predictions, fell short of investor expectations. Major tokens associated with artificial intelligence, such as the Artificial Superintelligence Alliance (FET), Bittensor (TAO), and Render (RNDR), experienced significant losses.
Specifically, FET dropped approximately 7.8% to $1.16, while TAO decreased by 4.5% to $295.22, and RNDR fell by 6.8% to $5.47, according to data from CoinMarketCap.
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Nvidia reported $30 billion in revenue for Q2 2024, a 15% increase from the previous quarter and $1.32 billion higher than estimates. However, this strong performance did not satisfy investors. “Better-than-expected doesn’t cut it for Nvidia. Investors evidently expect this company to blow away expectations,” remarked market analyst Lisa Abramowicz in a post on Aug. 28.
Some experts had anticipated Nvidia to outperform Wall Street’s expectations by at least 10%. Despite these high expectations, Nvidia’s stock closed on Aug. 28 at $125.61, only to drop further by 6.89% in after-hours trading, reaching $116.95, as per Google Finance data.
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The performance of AI-focused crypto tokens has historically been closely tied to Nvidia’s earnings reports. Market participants had foreseen a potential decline in these tokens following the earnings release. On Aug. 23, a user named Shogun suggested, “You might catch gains being long until a day before, but I’d bet you’re better off shorting for the dump after.”
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Nvidia, known for producing chips critical for training and deploying AI models, previously saw a similar market reaction after its Q1 earnings in May, despite an 18% increase in revenue compared to Q4 2023. Bloomberg’s Ed Ludlow commented on Aug. 28, “The very lofty estimates were very lofty indeed,” while also noting that Nvidia’s business momentum remains strong.
This downturn follows a significant surge in the market capitalization of AI and big data crypto projects, which grew by 79.7% in the three weeks following the “Crypto Black Monday” on Aug. 5, when Bitcoin dropped below $50,000 for the first time since February. Around that time, the market cap of AI and big data projects hit a yearly low of $18.21 billion.
