The stock market was volatile on Thursdsay, but the Nasdaq Composite (^IXIC 1.10%) outperformed once again. As of 1 p.m. EDT, the Nasdaq was up more than half a percent, outpacing other major benchmarks.

Cryptocurrency stocks have gotten a lot of attention lately, especially with the huge movements in the prices of various tokens. Many investors prefer ancillary plays on crypto, and on Thursday, investors got their first chance to react to the latest earnings reports from Nvidia (NVDA 2.57%) and Robinhood Markets (HOOD 6.60%). Below, we'll look at both of these Nasdaq stocks to see how they reacted to the fast-moving crypto market over the past quarter.

Nvidia gets a lift

Shares of Nvidia moved up 5% on Thursday afternoon. The semiconductor stock's connection to cryptocurrency involves the frequent use of its graphics processing unit chips in mining rigs, but the business goes far beyond that niche, and its latest earnings results showed the company's ongoing success.

Nvidia's numbers were fantastic. Revenue hit a record of $6.51 billion, rising 68% year over year in the second quarter of 2021. Gaming revenue soared 85%, while the data center segment posted respectable 35% sales gains. Adjusted earnings of $1.04 per share topped expectations and were up nearly 90% from year-ago levels. Nvidia continued to widen its margins and generate immense levels of free cash flow.

Technician examining semiconductor chips in a factory setting.

Image source: Getty Images.

Moreover, Nvidia sees demand rising. Guidance for $6.8 billion in sales for the third quarter would represent yet another record.

On one negative note, Nvidia did say that its planned acquisition of Arm Holding would likely take longer than hoped. Nevertheless, the company still seems optimistic that it will eventually be able to overcome hurdles and get the deal done.

Investors are responding positively to strong demand for computing power across the board, going well beyond cryptocurrency to encompass every aspect of digital transformation. As long as those underlying trends remain intact, Nvidia appears well positioned to take full advantage.

Robinhood slides

Meanwhile, shares of Robinhood Markets were down more than 8%. The retail investing broker's first financial report as a publicly traded company included some encouraging metrics, but Robinhood also warned about some adverse trends in crypto trading behavior that could hit its fundamentals going forward.

Robinhood's second-quarter numbers were quite strong, but there were some surprising details. Total net revenue jumped 131% to $565 million, with transaction-based revenue climbing at an even faster 141% pace. The vast majority of the gains in revenue stemmed from cryptocurrency trading, with segment sales coming in at $233 million versus only $5 million in the year-earlier quarter. By contrast, revenue from equity trades fell by more than 25% during the period and represented less than 10% of total company sales. Total users doubled to 21.3 million, while assets under custody tripled to more than $100 billion. Yet the company posted a substantial loss, as many had expected.

However, Robinhood sees headwinds ahead. In particular, the broker believes that seasonality will contribute to lower levels of trading activity in the third quarter, and Robinhood isn't expecting to see nearly as high a volume of new customers coming in. The company expects to invest in platform-enhancing technology, but investors also need to be prepared for large stock-based compensation charges and the prospects for newly registered shares to come onto the market in the coming months.

Robinhood has democratized investing, but that doesn't mean it will make money doing so. For now, shareholders will have to be patient to see where Robinhood's next big source of revenue comes from.