Nvidia revealed that just two unnamed customers accounted for 39 percent of its total revenue in Q2, sparking debate about risk and transparency.
Key Takeaways
- Two unidentified customers made up a combined 39 percent of Nvidia’s Q2 revenue, up from 25 percent last year.
- Customer A contributed 23 percent and Customer B 16 percent, totaling nearly 6 billion dollars in sales.
- These customers are classified as direct buyers, meaning they purchase chips to assemble systems for others, not for their own use.
- Nvidia’s data center segment, heavily reliant on cloud providers, now represents 88 percent of total revenue.
What Happened?
In a recent SEC filing, Nvidia disclosed that two unnamed direct customers were responsible for a combined 39 percent of its revenue in the fiscal second quarter ending in July. The spike in client concentration has stirred investor concern, particularly given the lack of transparency around the identities of these buyers. Nvidia declined to name the clients, referring to them only as Customer A (23 percent) and Customer B (16 percent).
Nvidia $NVDA said sales to just one customer represented 23% of its total $46.7 Billion of revenue from the quarter
— Evan (@StockMKTNewz) August 27, 2025
Someone spent $10.75 Billion with Nvidia during the quarter 🤯 pic.twitter.com/2IbEocnnQn
Nvidia’s Revenue Heavily Concentrated Among Few Clients
The 39 percent share from just two customers marks a significant increase from the same quarter a year ago, when the top two clients accounted for only 25 percent of sales. These customers are described as direct buyers, meaning they purchase Nvidia’s chips to create integrated systems or components, which are then sold to the actual users such as cloud service providers, government agencies, or large enterprises.
- Examples of such direct customers include Foxconn, Quanta, and Dell.
- These systems are then passed on to indirect customers, including the likes of Amazon, Google, Microsoft, and Oracle.
- Nvidia confirmed that two indirect customers also accounted for over 10 percent of total revenue, routed through these unnamed direct buyers.
Cloud Providers Still Power Nvidia’s Core Business
Nvidia’s data center segment continues to dominate its earnings, contributing 88 percent of total revenue in Q2. Of that, roughly half came from cloud giants, according to CFO Colette Kress.
- The drop in China’s contribution to Nvidia’s revenue was also notable, falling to 5.9 percent from 12.5 percent the previous quarter.
- In contrast, the US accounted for 50.2 percent, Singapore 21.7 percent, and Taiwan 18.2 percent.
Despite concerns, CEO Jensen Huang presented an optimistic long-term outlook. He forecasted AI infrastructure spending could reach 3 to 4 trillion dollars by 2030, and projected Nvidia could capture up to 70 percent of costs from each 50 billion dollar AI data center build, through not just GPUs but also networking, accelerators, and software.
Market Reactions and Analyst Warnings
While Nvidia’s stock initially dropped on earnings day, it quickly rebounded as traders viewed the dip as a temporary slowdown rather than a fundamental shift. However, some analysts remain cautious.
- Frank Lee of HSBC warned there may be no short-term earnings boost without clearer visibility into 2026 cloud capital spending.
- Investors are closely watching cloud infrastructure capex trends as a key indicator of Nvidia’s revenue trajectory.
A Growing Customer Mix May Offset Risks
Nvidia said its demand base is broadening beyond hyperscalers, now including AI-focused enterprises, foreign governments, and a new category it calls neoclouds. The company also noted meaningful contributions from an AI research and development firm, although it did not reveal the name.
These newer players could help diversify the revenue base, easing fears about over-reliance on just a few customers. Yet the secrecy surrounding its largest clients leaves open questions about how sustainable Nvidia’s growth truly is in the short term.
CoinLaw’s Takeaway
In my experience, anytime a company depends this heavily on just a few clients, it raises red flags. Almost 40 percent of Nvidia’s revenue now hinges on two mystery players. That’s a risky position, no matter how fast AI is growing. Yes, the long-term vision is compelling, and I genuinely believe in Nvidia’s leadership in AI infrastructure. But without transparency, investors are flying a bit blind. I’d keep a close eye on who these customers might be and how quickly Nvidia can diversify its client base.
