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 keeping with a filing with the Securities and Change Fee.

On Wednesday, the chipmaker reported report income of $46.7 billion throughout the quarter that ended on July 27 — a 56% year-over-year improve largely pushed by the AI information middle increase. Nevertheless, subsequent reporting highlighted how a lot of that progress appears to be coming from only a handful of consumers.

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

In the course of the first half of the fiscal yr, Nvidia says Buyer A and Buyer B accounted for 20% and 15% of whole 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 — similar to unique gear producers (OEMs), system integrators, or distributors — who buy their chips instantly from Nvidia. Oblique clients, similar to cloud service suppliers and shopper web corporations, buy Nvidia chips from these direct clients.

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

Actually, Nvidia’s Chief Monetary Officer Nicole Kress mentioned that “massive cloud service suppliers” accounted for 50% of Nvidia’s data center revenue, which in flip represented 88% of the corporate’s whole 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 consumers does current a major danger,” the excellent news is that “these clients have bountiful money readily available, generate large quantities of free money circulation, and are anticipated to spend lavishly on information facilities over the subsequent couple of years.”