Nvidia's Revenue Concentrated

Nvidia's Q2 revenue reveals a significant concentration of sales, with 39% attributed to just two unnamed customers. Customer A accounted for 23% and Customer B for 16% of the total revenue. These customers are classified as direct buyers who purchase chips to assemble systems for resale to cloud providers, government agencies, and enterprises.

The reliance on these two direct customers has increased substantially from the previous year when the top two clients contributed 25% of sales. This concentration raises concerns about potential risks if these major customers reduce orders or switch suppliers.

Despite the customer concentration, Nvidia's data centre business, which relies heavily on cloud providers, accounts for 88% of its total revenue. The company anticipates continued growth in AI infrastructure spending, projecting a market of $3 to $4 trillion by 2030.