Nvidia’s two biggest customers had an outsize effect on the company’s Q2 revenue. “Customer A” accounted for 23% of their revenue, while “Customer B” made up an additional 16%. Yet the tech giant is highly dependent on one big client—which represents 39% of the firm’s work. This reliance only deepens as it swims upstream against the current of the ever-increasing push for artificial intelligence (AI) infrastructure.
In this most recent quarterly disclosure, Nvidia recently disclosed hitting that remarkable milestone. Its data center business was a staggering 88% of the company’s total revenue in the second quarter. This recent wave underscores the tendency of data centers to prop up the burgeoning workloads spawned by AI applications. The company’s transparency in sharing customer revenue figures has sparked renewed discussion regarding the extent to which Nvidia’s remarkable growth is driven by a handful of dominant cloud providers.
Historically, that’s the top two customers combined — they made up 14% and 11% of Nvidia’s sales in that same quarter last year. This represents a dramatic increase in their financial clout. At GTC, Nvidia’s co-founder and CEO, Jensen Huang, pointed out this monumental trend. He noted that large, public cloud service providers, or hyperscalers, will invest at least $600 billion in infrastructure this year.
“As you know, the capex of just the top four hyperscalers has doubled in two years as the AI revolution went into full steam,” – Jensen Huang
The recent data indicates that major players such as Microsoft, Amazon, Google, and Oracle are pivotal in propelling Nvidia’s growth. There are deeper questions about the sustainability of this level of dependence on a highly concentrated customer base. Analysts are closely monitoring these developments. HSBC analyst Frank Lee recently cautioned against extrapolating too much from Nvidia’s impressive outlook for future earnings.
“We see limited room for further earnings upside revision or share price catalyst in the near-term unless we have increasing clarity over upside in 2026 [cloud service provider] capex expectations,” – Frank Lee
Nvidia sells more than just graphics processing units (GPUs), flexing its business to a variety of other chip types, expanding revenue streams. GPUs are the critical building blocks of AI-tuned data centers, whose capacity alone might run the state $50 billion per center. Nvidia has a clear path to getting 60-70% of these costs leading to more cementing its market dominance and position.
In this context, the company’s quarterly financial disclosures have become important leading indicators for investors and industry watchers to monitor. As Nvidia continues to grow, it will be imperative to assess how its reliance on a few high-revenue customers impacts its long-term stability and growth trajectory.
Nvidia’s leadership acknowledges that significant revenue streams can fluctuate based on a small number of clients.
“We have experienced periods where we receive a significant amount of our revenue from a limited number of customers, and this trend may continue,” – Nvidia
AI technologies are developing faster than ever and the cloud computing revolution has just begun. To continue its explosive growth in this rapidly transforming market, Nvidia will need to branch out beyond its traditional customer base. The tech industry will remain attentive to how these relationships evolve in the coming quarters and how they might influence Nvidia’s strategic direction.