Nvidia’s second quarter revenue heavily relies on just two customers, accounting for nearly 40% of total revenue. The chipmaker reported record revenue of $46.7 billion, with a significant portion coming from AI data center sales. Nvidia did not identify the customers, only referring to them as “Customer A” and “Customer B.”

During the first half of the fiscal year, Customer A and Customer B accounted for 20% and 15% of total revenue, respectively. Four other customers made up the remaining percentages of Q2 revenue. These customers are considered “direct” customers who purchase chips directly from Nvidia.

Nvidia’s Chief Financial Officer noted that “large cloud service providers” were responsible for 50% of the company’s data center revenue, which represented 88% of total revenue. Analysts believe the concentration of revenue among a small group of customers poses a risk, but these customers have strong financial positions and are expected to invest heavily in data centers.

Overall, Nvidia’s heavy reliance on a small number of customers for revenue poses a significant risk. However, the customers in question have substantial cash reserves, generate high levels of free cash flow, and are expected to continue investing in data centers, providing some optimism for Nvidia’s future prospects.

Read more at Yahoo Finance: Nvidia says two mystery customers accounted for 39% of Q2 revenue