Nvidia doubles profits, but AI tokens see sharp declines

Nvidia’s long-awaited earnings report has arrived, bringing impressive financial results for the company in the second quarter, ending July 28, 2024. According to the company, revenues reached $30 billion, an increase of 122% compared to the same period last year.

Additionally, the company’s earnings per share were $0.68 in the quarter, up 168% from the same period in 2023. These figures beat analysts’ projections, who expected $28.72 billion in revenue and earnings of $0.64 per share.

The robust financial performance is driven by growing demand for its Artificial Intelligence (AI) products and services. However, cryptocurrencies linked to the AI ​​sector have not performed positively, registering sharp declines even after the data.

NVIDIA and AI tokens?

NVIDIA’s earnings report sparked speculation about its potential impact on AI-related cryptocurrencies. But that positive impact didn’t materialize, and most AI-related tokens opened sharply lower on Thursday (29). Of the 10 largest by market value, only Internet Computer (ICP) opened the day higher, rising 1.6%.

FET, one of the largest AI tokens, fell 6.2%, while RENDER plunged 7.1% in the last 24 hours. The biggest drop was in AGIX, whose price fell 8.2%. Of the top 10 AI tokens, nine saw losses in the last 24 hours.

Despite being under selling pressure, FET is also on the verge of a rally, according to a recent analysis. And these tokens have also seen strong gains over the past seven days, indicating that the current losses are a correction from a move that anticipated Nvidia’s results.

Competition in the chip industry

Nvidia’s position is being challenged as the AI ​​chip market becomes increasingly competitive. Startups like Cerebras, d-Matrix and Groq are gaining traction, securing investment to enhance their product offerings and compete in the AI ​​hardware space.

Additionally, major tech companies like Microsoft, Meta, Amazon, Alphabet, and OpenAI, which currently rely on Nvidia’s upcoming Blackwell processors, are also developing their own AI chips. This could result in the company suffering losses in terms of market share.

Despite Nvidia’s positive earnings report, there is a U.S. Department of Justice (DoJ) investigation into potential anticompetitive practices. The probe focuses on whether the company leveraged its market dominance unfairly, which could lead to significant legal and regulatory implications.

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