“`html
Nvidia’s Revenue Dependency on Customers
Nvidia reported that two unnamed customers, referred to as Customer A and Customer B, contributed a combined 39% of its revenue in the second quarter of fiscal 2026, marking an increase from 30% in the previous quarter. Specifically, Customer A accounted for 23% of total revenue ($18.23 billion) and Customer B for 16% ($13.23 billion). This dependency signifies that without these customers, Nvidia would have experienced a revenue decline of approximately $2.36 billion quarter-over-quarter.
Financial Overview
In fiscal Q2, Nvidia generated $46.74 billion in revenue, an increase of $2.64 billion from Q1 ($44.1 billion). The company’s compute and networking segment, primarily driven by AI sales, contributed 87.9% of total revenue. Nvidia’s supply chain complexity, involving numerous suppliers and distributors, raises concerns about its reliance on these major customers who facilitate purchases made by large cloud service providers.
Market Context
This trend isn’t unique to Nvidia; other tech companies, including Broadcom, are similarly reliant on a limited number of major customers for revenue growth. As capital expenditures among leading cloud companies are currently at five-year highs, any future pullback could impact Nvidia significantly, requiring investors to consider the cyclical nature of this industry.
“`
