Nvidia says two mystery customers accounted for 39% of Q2 revenue

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

On Wednesday, the chipmaker reported record revenue of $46.7 billion during the quarter that ended on July 27 — a 56% year-over-year increase largely driven by the AI data center boom. However, subsequent reporting highlighted how much of that growth seems to be coming from just a handful of customers.

Specifically, Nvidia said that a single customer represented 23% of total Q2 revenue, while sales to another customer represented 16% of Q2 revenue. The filing does not identify either of these customers, only referring to them as “Customer A” and “Customer B.”

During 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 accounted for 14%, 11%, another 11%, and 10% of Q2 revenue, the company says.

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

In other words, it sounds unlikely that a big cloud provider like Microsoft, Oracle, Amazon, or Google might secretly be Customer A or Customer B — though those companies may be indirectly responsible for that massive spending.

In fact, Nvidia’s Chief Financial Officer Nicole Kress said that “large cloud service providers” accounted for 50% of Nvidia’s data center revenue, which in turn represented 88% of the company’s total revenue, according to CNBC.

What does this mean for Nvidia’s future prospects? Gimme Credit analyst Dave Novosel told Fortune that while “concentration of revenue among such a small group of customers does present a significant risk,” the good news is that “these customers have bountiful cash on hand, generate massive amounts of free cash flow, and are expected to spend lavishly on data centers over the next couple of years.”