Nvidia says two mysterious clients represent 39% of Q2 revenue

Nearly 40% of the revenue from the second quarter of NVIDIA came from only two clients, according to the submission to the Securities and Exchange Commission.

On Wednesday, the chipmaker reported a record revenue of $ 46.7 billion in the quarter, which ended on July 27-Increased by 56% compared to the year, largely conditioned by the boom of the AI ​​Data Center. However, the subsequent reporting emphasized how much of this growth it seems only from a handful of customers.

Moreover, NVIDIA stated that one customer represents 23% of the total revenue from Q2, while the sales of another customer represent 16% of Q2 revenue. The submission does not identify any of these clients, referring to them only as « Client A » and « Client B. »

In the first half of the fiscal year, NVIDIA says that the client A and the client B represents 20% and 15% of total revenue respectively. Four other customers represent 14%, 11%, another 11%and 10%of Q2 revenue, the company says.

In its submission, the company says that they are all « direct » customers – as manufacturers of original equipment (OEM manufacturers), system integrators or distributors – who buy their chips directly from NVIDIA. Indirect customers, such as cloud service providers and consumer internet companies, buy NVIDIA chips from these direct customers.

In other words, it sounds unlikely that a large cloud provider like Microsoft, Oracle, Amazon or Google may secretly be a customer or client B – although these companies can be indirectly responsible for these massive costs.

In fact, NVIDIA Chief Financial Officer Nicole Cress said that « large cloud service providers » represent 50% of NVIDIA data revenue, which in turn represents 88% of the company’s total revenue, according to CNBC.

What does this mean to the future prospects of NVIDIA? Gimme Credit Analyst Dave Novosel told Fortune that although « the concentration of revenue among such a small group of clients poses a significant risk », the good news is that « these customers have abundant cash, generate huge sums of free cash and are expected to spend extensively on data centers over the next few years. »