Nvidia says two mystery customers accounted for 39% of second quarter revenue

Nearly 40% of NVIDIA’s second quarter revenue came from just two customers, according to filings with the Securities and Exchange Commission.

On Wednesday, the chipmaker reported record revenue of $46.7 billion during the quarter ended July 27th. This is a 56% increase from the previous year, driven primarily by the AI ​​data center boom. However, subsequent reports highlighted how much of that growth comes from just a handful of customers.

Specifically, Nvidia said one customer accounted for 23% of second quarter revenue, while sales to another accounted for 16% of second quarter revenue. The filing does not identify any of these customers and only refers to “Customer A” and “Customer B.”

In 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 account for 14%, 11%, and even 11%, and 10% of second-quarter revenue, the company says.

In its filing, the company states that these are all “direct” customers who purchase chips directly from Nvidia, such as original equipment manufacturers (OEMs), systems integrators or distributors. Indirect customers, such as cloud service providers and consumer internet companies, purchase NVIDIA chips from these direct customers.

In other words, it seems unlikely that large cloud providers like Microsoft, Oracle, Amazon, and Google are secretly Customer A or Customer B, but those companies could be indirectly responsible for their mass spending.

In fact, Nicole Kress, Nvidia’s Chief Financial Officer, said 50% of Nvidia’s data center revenues account for 50% of Nvidia’s data center revenues, according to CNBC.

What does this mean for Nvidia’s future prospects? Gimme credit analyst Dave Novosel told Fortune that “concentration of revenue for such a small group of client groups poses significant risks,” but “these customers are expected to have a wealth of cash in their hands, generate large amounts of free cash flow and actively spend on data centers over the next few years.”