Nvidia's Record-Breaking Revenue Reveals Risky Dependence on Mystery Mega-Buyers

Nvidia says two mystery customers accounted for 39% of Q2 revenue | TechCrunch

Nearly 40% of Nvidia's second quarter revenue came from just two customers, according to a filing with the Securities and Exchange Commission. 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. What does this mean for Nvidia's future prospects? Gimme Credit analyst Dave Novosel told Fortune that while "concentration of revenue among such a small group of customers does present a significant risk," the good news is that "these customers have bountiful cash on hand, generate massive amounts of free cash flow, and are expected to spend lavishly on data centers over the next couple of years."

More than 50% of Nvidia's data center revenue comes from three customers -- $21.9 billion in sales recorded from the unnamed companies

How would you feel if just three customers made up nearly half of your sales? Nvidia just released its second-quarter earnings for 2025, which showed the company breaking its sales records. This is great news for the AI GPU giant and its investors, but the quarterly report also showed a risk that the company is taking. Business publication Sherwood noted that nearly 53% of the reported revenue for the Green Team's Data Center division comes from just three unnamed customers, totaling about $21.9 billion in sales. This is broken down to $9.5 billion from Customer A, $6.6 billion from Customer B, and $5.7 billion from Customer C. This might not sound like a problem -- after all, why complain if three different entities are handing you piles and piles of money -- but concentrating the majority of your sales to just a handful of clients could cause a sudden, unexpected issue. For example, the company's entire second-quarter revenue is around $46 billion, which means that Customer A makes up more than 20% of its sales. If this company were to suddenly vanish (say it decided to build its own chips, go with AMD, or a scandal forces it to cease operations), then it would have a massive impact on Nvidia's cash flow and operations. These scenarios are unlikely to happen soon, though, as investors are still bullish about AI tech, and Nvidia's competitors are still envious of the tech stack that the Green Team can offer. Still, resting the future of your company (especially one so big) on a narrow base will likely keep some executives awake at night. The company did not name which institutions were its biggest clients, but we can take a guess based on the plans and announcements that several big tech companies have made. One of the first that comes to mind is Elon Musk and xAI. The billionaire has previously broken data center records, setting up 100,000 Nvidia H200 GPUs in a record 19 days last year -- something that usually takes four years to finish, according to Nvidia CEO Jensen Huang. But more than that, Musk has dreams of running 50 million H100-equivalent GPUs in the next five years. OpenAI and Oracle also recently signed a deal to build a Stargate data center with over 2 million AI chips -- estimated to be equivalent to 5GW spread across 20 different data centers. Meta is also another big Nvidia customer that has recently been in the news, with Zuckerberg putting up data centers housed in tents and announcing plans for 'several multi-GW clusters', some of which are reportedly as large as Manhattan. Even though Nvidia is facing issues with its China sales, first when President Donald Trump banned its H20 chip -- resulting in a $5.5 billion write-off -- and second, when Beijing instructed Chinese companies to stop buying the chips a few weeks after Trump reopened the H20 taps to China once again, these numbers could mean that the company is still relatively safe from ruin, even if it loses complete access to the East Asian country. So, Nvidia's sales to these three companies are probably the reason why Huang can spend his time shuttling between Beijing and Washington, with his company seemingly being used as a political tool by both sides of the ongoing trade war.

The world's biggest AI chip supplier faces massive risk as mystery trio control half of Nvidia's record data center revenue

Massive GPU installations reshape data centers into unprecedented mega-scale operations Nvidia's latest earnings report for 2025 has drawn attention not only for breaking sales records once again, but also for revealing a risk hidden beneath the numbers. The company reported $46 billion in its Q2 2026 quarterly revenue, with its Data Center division contributing $21.9 billion. But what really stands out is that "nearly 53%" of this income came from just three customers. The report detailed $9.5 billion from Customer A, $6.6 billion from Customer B, and $5.7 billion from Customer C. While this concentration of sales demonstrates strong relationships with powerful buyers, it also suggests a structural vulnerability in Nvidia's financial base. Nvidia has not confirmed the identities of these clients, but industry observers have made informed guesses. Elon Musk's xAI is often mentioned, particularly after a record-setting installation of 100,000 Nvidia H200 GPUs in just 19 days, a task CEO Jensen Huang said normally requires four years. Musk's stated ambition of running 50 million H100-equivalent GPUs over five years further strengthens the speculation. Another possible contender is the OpenAI and Oracle partnership, which announced plans for a Stargate data center featuring more than two million AI chips. Meta has also been expanding aggressively, with "several multi-GW clusters" reportedly the size of Manhattan, adding more weight to the theory. These projects represent demand levels far beyond typical enterprise needs, closer to what one would expect when equipping a supercharged workstation or deploying an entire fleet of machines designed with the best CPU available. It may seem reassuring to have such massive contracts locked in, but the concentration risk is difficult to ignore. If one of these entities were to pivot toward in-house chip design, switch to a competitor like AMD, or encounter operational issues, Nvidia would face a sudden financial hole. Customer A alone accounts for more than 20% of quarterly sales. The dependence is stark, and investors cannot ignore how fragile such reliance might become. Nvidia's dominance in GPUs remains clear, but market history shows that leaders tied too closely to a few clients can face serious disruption. Geopolitics adds another layer of uncertainty - Nvidia has already absorbed a $5.5 billion hit following restrictions on its H20 chip, compounded when Chinese firms were directed to halt purchases after an initial reopening of sales. These events highlight how the company's market position can be influenced by decisions far outside the scope of chip design or supply chain management. As of today, Nvidia's GPUs remain unrivaled, but the underlying question persists: can the company maintain its momentum if its mystery trio ever decides to walk away?

A Quarter of Nvidia's Revenue Comes From a Single Giant Customer

In case you haven't heard, there might be a slight problem with the US economy: that it's being propped up by a tiny number of tech companies betting big on an AI revolution. Among the tech titans, no company is more important than the AI chip maker Nvidia. Often likened to a shovel seller during a goldrush, Nvidia's revenue has exploded in recent years, from $26.9 billion in 2023 to a heart stopping $130.5 billion in 2025. That unprecedented growth propelled Nvidia to become the first company in stock market history to close with a market cap above $4 trillion -- currently the most valuable company in the world, ahead of longer-standing giants like Microsoft and Apple. With so much riding on Nvidia, one would expect a diverse and healthy internal financial situation there. Sadly, that's not necessarily what investors saw when the company dropped its second quarter tax filing just a few days ago. Though the company brought in a mind-blowing $46.7 billion in revenue in the last three months alone, the source of that dough is highly concentrated among a few big spenders. As TechCrunch pointed out, close to 40 percent of Nvidia's simply unfathomable quarterly revenue came from just two clients. The two anonymous buyers, known as "Customer A" and Customer B" in the filings, accounted for an incredible 23 and 16 percent of the chip giant's revenue, respectively. Per the company, these whales are customers that purchase chips from Nvidia directly, like distributors or original equipment manufacturers (OEMs). To TC's thinking, this makes it highly unlikely that a similarly massive company like Microsoft or Google is hiding behind Customer A or B, though they could be working through a third-party intermediary. All that risk is leading some analysts, like The Motley Fool's Christopher Ruane, to argue that Nvidia is at a tipping point: the chip firm is either way overvalued, or massively undervalued. "The sort of spending we have seen in the past couple of years from large tech companies seems hard if not impossible to sustain over the long term in the absence of transformational business results," Ruane wrote. "But I would be surprised if the price is the same five years from now." Whatever happens next could have drastic implications for any fund tied to the S&P 500, as Nvidia now commands a monster 7.3 percent of the total index -- meaning the health of the overall stock market now hinges on whether Company A and Company B can continue spending like sailors.

Who are Nvidia's mystery mega-buyers?

Nvidia is at the center of the artificial intelligence boom, and its latest earnings report confirms this in spectacular fashion. On Wednesday, the chipmaker reported a record-breaking revenue of $46.7 billion for its second quarter -- a staggering 56% year-over-year increase. However, a deeper look into the company's filing with the Securities and Exchange Commission (SEC) reveals a surprising and potentially risky concentration of this success: nearly 40% of that massive revenue came from just two unidentified customers. The SEC filing is clear but intentionally vague. It states that a single customer, referred to as "Customer A," represented 23% of total Q2 revenue. Another entity, "Customer B," accounted for 16% of Q2 revenue. Together, these two mega-buyers were responsible for 39% of Nvidia's sales in the quarter. The filing also notes that four other customers contributed 14%, 11%, another 11%, and 10% of revenue, respectively, highlighting a dependency on a small group of major players. The filing specifies that these are all "direct" customers -- such as original equipment manufacturers (OEMs), system integrators, or distributors -- who purchase chips directly from Nvidia. This means it is unlikely that a big cloud provider like Microsoft, Oracle, Amazon, or Google is secretly Customer A or Customer B. However, that doesn't mean the cloud giants aren't behind this spending. These indirect customers purchase Nvidia chips from the direct customers. Nvidia's Chief Financial Officer, Nicole Kress, shed light on this by stating 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. In simple terms, while a distributor or system integrator might be the "direct customer" on paper, they are likely buying these billions of dollars worth of chips on behalf of a hyperscaler like Microsoft or Google to build out their AI data centers. This heavy reliance on a small number of buyers presents a classic business dilemma. Gimme Credit analyst Dave Novosel told Fortune that this "concentration of revenue among such a small group of customers does present a significant risk." If one of these key customers were to reduce their spending or switch suppliers, the impact on Nvidia's bottom line would be immediate and severe. However, there's a powerful counter-argument, which Novosel also points out. The good news for Nvidia is that "these customers have bountiful cash on hand, generate massive amounts of free cash flow, and are expected to spend lavishly on data centers over the next couple of years." The customers driving this demand -- the Microsofts, Googles, and Amazons of the world -- are locked in an existential AI arms race. They cannot afford to slow down their spending on AI infrastructure if they want to remain competitive. This provides Nvidia with a relatively stable and predictable stream of massive orders, mitigating the traditional risks associated with customer concentration. Ultimately, Nvidia's customer concentration is a direct reflection of the current state of the AI industry itself. While AI technology is spreading everywhere, the race to build the foundational models and the massive data centers required to run them is being fought by a very small number of incredibly wealthy "hyperscaler" companies. Nvidia's record-breaking success is undeniable, but the revelation that so much of it is built on the spending of just a handful of entities is a crucial piece of context. It highlights both the incredible scale of the AI boom and the surprisingly narrow foundation upon which it is currently being built. For investors and industry watchers, the health and spending habits of these few mystery customers will be the most important factor in determining Nvidia's future prospects.

Nvidia Leans Heavily on Two Undisclosed Customers for Revenue Boom - NVIDIA (NASDAQ:NVDA)

Last week, Nvidia Corp. NVDA reported second quarter earnings that exceeded analysts' forecasts. However, the focus shifted to two undisclosed customers who made up a substantial 39% of the company's revenue. Referred to as "Customer A" and "Customer B" in Nvidia's SEC filing, these clients were responsible for 23% and 16% of Nvidia's Q2 revenue, respectively. This marks a significant rise from the prior year, where they accounted for 14% and 11% respectively. Despite Nvidia's stock emerging as the top performer in 2024 and witnessing a 30% surge year-to-date, the concentration of these customers presents potential risks. Any shift in the purchasing behavior of these two clients could have a significant impact on Nvidia, reports The Fortune. Last week Nvidia's CFO, Colette Kress, also disclosed that half of the revenue from its largest segment, the data-center business, is dependent on cloud providers. Also Read: Nvidia, AMD See 'Special Treatment' From Trump As Chip Supply Chain Faces New Disruptions While Nvidia holds over 90% of the AI GPU market, cloud providers such as Google and Amazon are considering alternatives to Nvidia chips. As per the outlet, Dave Novosel, a senior investment analyst at Gimme Credit, downplayed the risk, emphasizing that the demand for AI progress remains robust and Nvidia's chips are industry leaders. He also pointed out that these customers have ample cash reserves and are projected to heavily invest in data centers in the upcoming years. Nvidia reported a Q2 revenue of $46.74 billion, a 56% increase from the same period last year, and a net income of $26.4 billion, a 59% year-over-year increase. The company attributed these figures to the continuous construction of AI data centers and the demand for its latest Blackwell chip. The significant reliance on two customers and the potential shift of cloud providers to alternatives pose a risk to Nvidia's future performance. The company's dominance in the AI GPU market and the continued demand for AI progress may offset these risks. However, the situation warrants close monitoring, as any significant changes could impact Nvidia's revenue and market position. Read Next Billionaire Fund Manager Doubles Down on Nvidia and Key AI Stack Play Image: Shutterstock/Shutterstock AI NVDANVIDIA Corp$173.67-3.61%Stock Score Locked: Want to See it? Benzinga Rankings give you vital metrics on any stock - anytime. Reveal Full ScoreEdge RankingsMomentum86.90Growth99.29QualityN/AValue6.66Price TrendShortMediumLongOverview This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors. Market News and Data brought to you by Benzinga APIs

Is Nvidia's Increasing Reliance on "Customer A" and "Customer B" a Red Flag for the AI Growth Stock? | The Motley Fool

In just five years, Nvidia's most important end markets shifted from gaming and professional visualization to data centers, though its core products remained the same -- graphics processing units (GPUs) and associated software and infrastructure. Companies across a wide array of industries now depend on Nvidia's solutions to power their AI workflows. But without a couple of key customers, Nvidia's growth in recent years wouldn't have been nearly as impressive as it was. Here's why Nvidia is increasingly relying on two customers, and if the AI growth stock is a buy now. In its quarterly reports, Nvidia regularly highlights the importance of a select group of key customers. It doesn't disclose their names, however. Instead, it refers to them as Customer A and Customer B. In its fiscal 2026 first quarter, Customer A represented 16% of total revenue and Customer B was 14%. But in its latest earnings report, delivered on Aug. 27, Nvidia said that Customer A had contributed 23% of total revenue and Customer B amounted to 16%. In just three months, those two companies went from 30% of total revenue to 39%. Nvidia's revenue was $44.1 billion in fiscal Q1 and $46.74 billion in fiscal Q2. Customer A and Customer B accounted for $13.23 billion in Q1 revenue and $18.23 billion in Q2 revenue. But Nvidia only grew revenue by $2.64 billion quarter-over-quarter. So without Customer A and B, Nvidia's revenue would have been down by $2.36 billion quarter-over-quarter. Customer A and Customer B aren't just Nvidia's key accounts: They are single-handedly supporting its investment thesis right now. The chipmaker's sales to four other direct customers contributed 14%, 11%, 11%, and 10% of revenue, respectively, in the fiscal second quarter. All of these unnamed customers' revenue was attributed to Nvidia's Compute and Networking segment for data centers -- which provided 87.9% of total revenue in its latest quarter. Nvidia's dependence on Customer A and Customer B is a risk worth monitoring. It's also a bit misleading due to the structure of Nvidia's supply chain. Nvidia's key end users are hyperscalers like Amazon Web Services, Microsoft Azure, Alphabet's Google Cloud, Meta Platforms, and Oracle Cloud Infrastructure. But these companies often buy Nvidia's chips through contractors that assemble AI server racks with Nvidia's GPUs and associated networking, storage, cooling, etc. For example, a hyperscaler may order one of Nvidia's GB300 Blackwell Ultra rack-scale servers from Hon Hai Precision Industry, commonly known as Foxconn, rather than buying it from Nvidia directly. On Aug. 26, Nvidia reported that Foxconn was among a list of companies adopting its new RTX Pro Servers for AI reasoning, physical AI, and business workloads. In its latest quarterly report, Nvidia listed add-in board manufacturers (companies that build graphics cards using Nvidia's chips), distributors, original device manufacturers, original equipment manufacturers, and system integrators as examples of its direct customers. By contrast, it described cloud service providers, internet companies, enterprises, and public sector utilities, among others, as indirect customers that largely purchase products through the direct customers. In other words, it's not that AWS or Microsoft is likely Customer A or Customer B. Rather, those tags are probably being put on major distributors that are likely supplying multiple cloud infrastructure providers. Nvidia's jargon around customer identities can make it difficult to determine just how much of its business is tied to each specific hyperscaler. However, based on the capital expenditures of top cloud companies, it's clear that Nvidia will need its key end users to profit from their AI spending to justify them boosting their order volumes. Nvidia isn't alone in the tech world in relying on just a few customers. Broadcom (AVGO 9.18%) management forecast that its AI semiconductor sales will make up over 32% of revenue in its fiscal third quarter. And a large fraction of that revenue is coming from a handful of customers. On its fiscal Q4 2024 earnings call in December, Broadcom management discussed how the company is working to expand its core customer base beyond the three hyperscalers that have been major contributors to its top line. Now, it has two additional hyperscalers that are developing their own next-generation AI XPUs. Broadcom forecasts that it will convert these prospects into revenue-generating customers by 2027. While we don't know for sure who these customers are, Meta and Alphabet are almost certainly two of the three established customers, and Apple and TikTok parent company ByteDance could be the prospects, based on other news reports that they are both building custom chips with Broadcom. Meta Platforms is building the world's first multigigawatt "supercluster" data center next year. And it's highly likely that this data center will be jam-packed with Broadcom AI clusters, given that Broadcom is working with Meta on its custom AI chips. Google Cloud partners with Broadcom to make its custom Tensor Processing Units, which power Google DeepMind's AI chatbot, Gemini, as well as Google Search and other applications. By following Broadcom's more direct commentary on its key hyperscale customers, we can infer that Nvidia is depending on the same cast of characters to drive its growth. Nvidia's increasing reliance on Customer A and Customer B isn't necessarily a red flag, as these are direct customers (likely suppliers) that are processing orders for multiple end-users. However, what does pose a risk to Nvidia, Broadcom, and the AI investing theme in general is the possibility of a pullback in capital expenditures by hyperscalers. Right now, capex as a percentage of revenue is at a five-year high for Amazon, Microsoft, Alphabet, Meta Platforms, and Oracle -- meaning that these companies are in expansion phases. However, eventually, the cycle may shift as these companies redirect their focus from accelerated growth to generating free cash flow. And when that happens, it will likely affect the primary beneficiaries of that spending -- companies like Nvidia and Broadcom. Nvidia is still a foundational AI growth stock to buy and hold, but investors who buy it should understand that these cyclical gyrations could lead to choppy stock price movements. However, volatility like this is worth enduring over the long term when a business's underlying fundamentals are sound.

Nvidia Says Two Buyers Drove 39% of Q2 Sales | PYMNTS.com

However, the filing underscored how much of that growth comes from just a few customers. One customer accounted for 23% of revenue during the quarter, while another made up 16%. The filing refers to them as Customer A and Customer B. Another four unnamed companies accounted for 46% of the company's revenue. Nvidia said in the filing that these are all "direct" customers, like original equipment manufacturers (OEMs), system integrators or distributors, who buy their chips directly from Nvidia. This makes it unlikely that cloud giants such as Microsoft, Amazon or Google would be Customer A or B, although these companies could be indirectly responsible for those spending levels, the TechCrunch report said. Nvidia Chief Financial Officer Colette Kress has said that "large cloud service providers" accounted for half of Nvidia's data center revenue, which in turn represented 88% of the company's total earnings, per the report. "Few companies in history have experienced a revenue trajectory as dramatic as Nvidia's over the past two years," PYMNTS reported Wednesday (Aug. 27). The company's quarterly earnings illustrate "not just the resilience of its business model but also the volatility of operating at the frontier of [AI] data infrastructure and global trade policy," the report said. Meanwhile, multiple industries, including cloud, chips, data storage, semiconductor manufacturing and data centers, are seeing revenue gains from AI, cementing its role as an economic driver. The chief catalyst is increasing enterprise adoption of AI. The PYMNTS Intelligence report "Since March, Triple the CFOs Report Very Positive ROI From GenAI" found that 90% of chief financial officers were seeing "very positive ROI" from generative AI, compared to the 26.7% who said the same in March 2024. "With gen AI yielding such strong results, CFOs are utilizing the technology in more areas of their businesses," PYMNTS reported Monday (Sept. 1). "These include using the technology for high-, medium- and low-impact tasks."