Nvidia Discloses That Two Unnamed Clients Accounted for 39% of Q2 Revenue

A report filed with the Securities and Exchange Commission reveals that nearly 40% of Nvidia’s Q2 revenue came from just two clients.

On Wednesday, the semiconductor giant announced record revenue of $46.7 billion for the quarter ending July 27, marking a 56% increase year-over-year, driven mainly by the growing demand for AI data centers. However, deeper analysis shows that a significant portion of this growth is attributed to a select group of customers.

Specifically, Nvidia disclosed that one client represented 23% of the total Q2 revenue, while another accounted for 16%. The identities of these clients remain undisclosed, labeled as “Customer A” and “Customer B.”

In the first half of the fiscal year, Customer A and Customer B contributed 20% and 15% of total revenue, respectively. Additionally, four other clients added 14%, 11%, another 11%, and 10% to the Q2 revenue, as indicated by the company.

The filing specifies that these clients are all “direct” customers—such as original equipment manufacturers (OEMs), system integrators, or distributors—who source their chips directly from Nvidia. Indirect clients, including cloud service providers and internet companies, obtain Nvidia chips through these direct channels.

This implies that major cloud players like Microsoft, Oracle, Amazon, or Google are unlikely to be Customer A or Customer B, although they may still influence significant spending.

Nvidia’s Chief Financial Officer Nicole Kress noted that “large cloud service providers” represented 50% of Nvidia’s data center revenue, which accounted for 88% of total revenue, according to CNBC.

What does this mean for Nvidia’s future? Analyst Dave Novosel from Gimme Credit told Fortune that while “the concentration of revenue among such a small group of clients poses a significant risk,” the upside is that “these clients possess considerable cash reserves, generate ample free cash flow, and are expected to heavily invest in data centers in the coming years.”