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

Almost 40% of Nvidia’s second quarter income got here from simply two clients, in line with a submitting with the Securities and Alternate Fee.

On Wednesday, the chipmaker reported file income of $46.7 billion through the quarter that ended on July 27 — a 56% year-over-year enhance largely pushed by the AI information middle increase. Nevertheless, subsequent reporting highlighted how a lot of that development 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.”

Through the first half of the fiscal yr, 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 — comparable to authentic tools producers (OEMs), system integrators, or distributors — who buy their chips straight from Nvidia. Oblique clients, comparable to cloud service suppliers and shopper web firms, buy Nvidia chips from these direct clients.

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

In truth, Nvidia’s Chief Monetary Officer Nicole Kress stated that “giant cloud service suppliers” accounted for 50% of Nvidia’s information middle income, which in flip represented 88% of the corporate’s complete income, in line with CNBC.

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