Nvidia’s Record Sales Raise Eyebrows as Two Customers Account for 39% of Revenue

Nearly two-fifths of Nvidia’s quarterly revenue came from just two customers, sparking both curiosity and caution in tech and investment circles. Nvidia’s Q2 sales soared to $46.7 billion, a 56% jump from last year, as the rush for AI data center hardware hit new heights.

Breaking Down Nvidia’s Revenue

One customer, “Customer A,” made up a massive 23% of the quarter’s earnings. “Customer B” contributed 16%, meaning these two alone accounted for a combined 39% of the quarter’s sales. Their names are a mystery, but filings say they are direct buyers, like OEMs or distributors, not tech giants such as Microsoft or Google who source chips through intermediaries.

The Role of Elite Customers

The influence doesn’t end there. Four more customers each made up between 10% and 14% of Nvidia’s revenue, showing just how concentrated Nvidia’s sales are among top industry players. The big driver? An intense demand for AI-powered data centers. Nvidia’s CFO revealed that large cloud providers generated 50% of the company’s data center revenue, which itself made up 88% of Nvidia’s total business.

The Risks Ahead

Experts warn that relying so heavily on a few major customers puts Nvidia at risk if their buying habits change or if the market shifts. However, analysts say these big buyers have strong cash reserves and aggressive spending plans, which should keep demand high for Nvidia’s hardware in the near term.

Nvidia’s future rides on a select group of buyers fueling AI’s rapid rise. Sustaining this pace could require new strategies to handle whatever tomorrow’s market brings.