Nvidia says two mystery customers accounted for 39% of Q2 revenue

Practically 40% of Nvidia’s second quarter income got here from simply two clients, in keeping with a filing with the Securities and Change Fee.

On Wednesday, the chipmaker reported record revenue of $46.7 billion through the quarter that ended on July 27 — a 56% year-over-year enhance largely pushed by the AI knowledge middle increase. Nonetheless, subsequent reporting highlighted how a lot of that progress appears to be coming from only a handful of shoppers.

Particularly, Nvidia stated {that a} single buyer represented 23% of complete Q2 income, whereas gross sales to a different buyer represented 16% of Q2 income. The submitting doesn’t determine both of those clients, solely referring to them as “Buyer A” and “Buyer B.”

In the course of the first half of the fiscal 12 months, Nvidia says Buyer A and Buyer B accounted for 20% and 15% of complete income, respectively. 4 different clients accounted for 14%, 11%, one other 11%, and 10% of Q2 income, the corporate says.

In its submitting, the corporate says these are all “direct” clients — akin to authentic tools producers (OEMs), system integrators, or distributors — who buy their chips immediately from Nvidia. Oblique clients, akin to cloud service suppliers and shopper web corporations, buy Nvidia chips from these direct clients.

In different phrases, it sounds unlikely {that a} large cloud supplier like Microsoft, Oracle, Amazon, or Google would possibly secretly be Buyer A or Buyer B — although these corporations could also be not directly liable for that huge spending.

In truth, Nvidia’s Chief Monetary Officer Nicole Kress stated that “massive cloud service suppliers” accounted for 50% of Nvidia’s data center revenue, which in flip represented 88% of the corporate’s complete income, in keeping with CNBC.

What does this imply for Nvidia’s future prospects? Gimme Credit analyst Dave Novosel told Fortune that whereas “focus of income amongst such a small group of shoppers does current a big threat,” the excellent news is that “these clients have bountiful money readily available, generate huge quantities of free money circulate, and are anticipated to spend lavishly on knowledge facilities over the following couple of years.”