Nvidia reported record Q2 revenue of $46.7 billion, a 56% year-over-year increase driven largely by AI data-center demand. A single customer represented 23% of Q2 revenue and another represented 16%, while during the first half those two customers accounted for 20% and 15% of revenue respectively. Four additional direct customers accounted for 14%, 11%, 11% and 10% of Q2 revenue. These major buyers are classified as direct customers such as OEMs, system integrators, or distributors, with cloud providers and consumer internet companies typically purchasing indirectly. Company figures show large cloud providers comprised half of data-center revenue, representing 88% of total revenue, creating concentration risk.
On Wednesday, Nvidia reported record revenue of $46.7 billion during the quarter that ended on July 27 - a 56% year-over-year increase largely driven by the AI data center boom. However, subsequent reporting highlighted how much that growth seems to be coming from just a handful of customers. Specifically, Nvidia said that a single customer represented 23% of total Q2 revenue, while sales to another customer represented 16% of Q2 revenue.
The filing does not identify either of these customers, only referring to them as "Customer A" and "Customer B." During the first half of the fiscal year, Nvidia says Customer A and Customer B accounted for 20% and 15% of total revenue, respectively. Four other customers accounted for 14%, 11%, another 11%, and 10% of Q2 revenue, Nvidia said.
In its filing, the company says these are all "direct" customers - such as original equipment manufacturers (OEMs), system integrators, or distributors - who purchase their chips directly from Nvidia, such as. Indirect customers, such as cloud service providers and consumer internet companies, purchase Nvidia chips from these direct customers. In other words, it sounds unlikely that a big cloud provider like Microsoft, Oracle, Amazon, or Google might secretly be Customer A or Customer B - though those companies may be indirectly responsible for that massive spending. In fact, Nvidia's Chief Financial Officer Nicole Kress said that "large cloud service providers" accounted for 50% of Nvidia's data center revenue, which in turn represented 88% of the company's total revenue, according to CNBC.
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