AI tokens fail to rally despite Nvidia’s bigger-than-estimated earnings

• Nvidia beat expectations after posting EPS of $0.68 and revenue of $30 billion in Q2.
• NVDA, along with several AI tokens, fell despite the positive earnings report.
• Investors may have already priced in higher than expected due to a spike in AI tokens last week.

Nvidia (NVDA) beat nearly all estimates in its second-quarter earnings report on Wednesday. The chip giant reported earnings per share (EPS) of $0.68, beating expectations of $0.65, and revenue of $30 billion, beating expectations of $28.9 billion. As a result, its annual revenue growth is now 122%. The company also expects revenue of $32.5 billion in Q3, also above the estimate of $31.9 billion.

Nvidia investors react, AI tokens stay mum

Following the announcement, NVDA’s share price ironically briefly fell nearly 5% before experiencing a slight upward correction. NVDA is trading at a 2% daily loss at the time of writing.

A similar trend is visible across several artificial intelligence (AI) tokens in the crypto market.

Given Nvidia’s market dominance of the AI ​​industry, its performance is seen as an indicator of the health and growth of companies/projects in the sector. As a result, most cryptocurrency investors use AI-related crypto tokens to gain major exposure to Nvidia’s price performance.

Anticipating positive Nvidia T2 earnings, AI-related cryptocurrencies surged last week, with some tokens posting gains of up to 60%. However, after Wednesday’s higher-than-estimated earnings report, AI tokens failed to rally, with the top 7 all trading in the red over the past 24 hours. The tokens seem to mirror similar movements in NVDA and Bitcoin (BTC).

As indicated in the image below, Near Protocol (NEAR), Internet Computer (ICP), Artificial Superintelligence (FET), RENDER and Bittensor (TAO) are all down for the day.

Cryptocurrencies related to AI

Another reason for their failure to rally on Nvidia’s positive report may be that investors are already pricing in higher-than-expected earnings given last week’s price increases in the sector.

With prices not seeing any huge exciting moves, some members of the community believe that a recovery is imminent in the coming days.