In the fiscal second quarter ending July 2025, Nvidia disclosed that two unnamed customers—labeled “Customer A” and “Customer B”—collectively accounted for 39% of its total revenue: 23% and 16%, respectively. This marks a substantial increase from the prior year, where the top two buyers contributed 14% and 11%.
Why It Matters
- High Concentration Risk
Nvidia’s mounting dependency on a tiny number of clients poses a strategic risk. Should either customer scale back, it could significantly dent revenue growth. - Primarily Direct Buyers
These customers are designated as direct customers—meaning they purchase Nvidia chips to assemble systems for resale to cloud providers, enterprises, or governments. This makes Nvidia’s exposure even less transparent. - Heavy Reliance on AI Infrastructure
Data center sales now make up 88% of Nvidia’s revenue, fueled by AI demand. Still, just two buyers driving 39% of total revenue signals overreliance within this segment.
Speculation Around Identities
While Nvidia doesn’t name its key clients, industry analysts suggest they’re likely among these heavyweights: Microsoft, Amazon, Alphabet/Google, Meta, Oracle, or major system integrators like Foxconn or Quanta.
Remarkably, CFO Colette Kress noted that about 50% of data center revenue stems from large cloud service providers—indirectly hinting that these mystery buyers serve hyperscalers and sovereign clients.
Context & Historical Trend
Nvidia has long exhibited client concentration. In Q2 FY2025, four customers accounted for 46% of revenue, and in Q3 that same year, three customers were responsible for 36%.
This quarter’s spike to 39% from two buyers underscores growing reliance on a narrower client base.
Strategic Implications
- Growth Vs. Stability
Strong AI chip demand supports Nvidia’s growth—but concentrated buyer dependency could threaten long-term revenue consistency. - Transparency & Investor Sentiment
Lack of client disclosure fuels investor concern. Greater visibility could ease worries about the sustainability of Nvidia’s explosive growth. - Diversification Opportunity
Nvidia must now explore broadening its buyer base—potentially through expanding into sovereign AI projects, enterprises, or regional “neoclouds”—to mitigate risk.
