Key Points:
– Two customers contributed to 39% of Nvidia’s revenue in the latest quarter
– Nvidia’s supply chain is complex, relying on various suppliers, equipment designers, and manufacturers
– Broadcom’s AI sales growth heavily depends on a few hyperscaler customers

Nvidia’s Shift to AI:
– Nvidia’s main markets shifted to data centers from gaming and visualization
– Nvidia’s revenue was $44.1 billion in fiscal Q1 and $46.74 billion in Q2
– Customers A and B accounted for $13.23 billion in Q1 revenue and $18.23 billion in Q2 revenue

Nvidia’s Customer Dependence:
– Customer A and B contributed to 39% of Nvidia’s total revenue
– Sales to other customers contributed 14%, 11%, 11%, and 10% of revenue in the fiscal second quarter
– Nvidia’s growth is driven by companies using its AI solutions

Broadcom and Nvidia’s Dependence:
– Broadcom’s AI semiconductor sales will make up over 32% of revenue in its fiscal third quarter
– Nvidia and Broadcom both rely on a small number of customers for revenue
– Both companies are dependent on hyperscalers for growth

Investment Considerations:
– Nvidia’s increasing reliance on key customers isn’t a red flag
– Nvidia remains a foundational AI growth stock to buy and hold
– Volatility may occur due to cyclical movements in customer spending

Should you invest $1,000 in Nvidia right now?
– Nvidia wasn’t among the 10 best stocks identified by the Motley Fool Stock Advisor team
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– Consider joining Stock Advisor to access their latest top 10 list

Read more at Nasdaq: Is Nvidia’s Increasing Reliance on “Customer A” and “Customer B” a Red Flag for the AI Growth Stock?