A couple of days ago, Nvidia reported a particularly strong quarter, resulting in over $46.7 billion in revenue despite no H20 sales to China. This was driven by strong demand for data center hardware, gaming and AI PCs, as well as automotive and robotics products. However, a new document now indicates that 39% of its revenue comes from just two customers.
TechCrunch notes that a Securities and Exchange Commission (SEC) filing shows that 23% of Nvidia"s Q2 revenue comes from "Customer A", while 16% comes from "Customer B". This means that out of the $46.7 billion revenue reported in the second quarter of Nvidia"s fiscal year, a massive $18.2 billion comes from just two customers. It is important to note that "customers" here likely refers to major entities such as organizations, rather than individuals. However, the identities of these entities were not disclosed.
Overall, in the first half of this fiscal year, both these customers accounted for 35% of total revenue, while four others were responsible for 46%, split as 14%, 11%, 11%, and 10%. Mathematically, this means that 81% of Nvidia"s revenue in two quarters came from just six customers. Even more interestingly, Nvidia highlighted that all of these were "direct" customers, such as OEMs, system integrators (SIs), or distributors, rather than cloud providers, which are considered indirect customers. That said, the revenue could also be driven by cloud sectors like Google Cloud, AWS, and Microsoft Azure, which are purchasing Nvidia hardware from Nvidia"s direct customers.
While reliance on so few paying customers can spell trouble at some point in time, Nvidia is bullish about its next quarter"s revenue projection too, saying that it expects to earn $54 billion, again without H20 shipments to China. This suggests ongoing business dealings with the aforementioned unidentified customers, who are likely spending a lot on data centers and AI PCs.