Almost 40% of the income of Nvidia’s second quarter came from only two customers, according to an application With the Securities and Exchange Commission.
On Wednesday, the chip maker reported a record income of $ 46.7 billion during the quarter that ended on July 27-a 56% increase on an annual basis, largely powered by the AI data center tree. However, the subsequent report emphasized how much of that growth seems to come from only a handful of customers.
In particular, Nvidia said that a single customer represented 23% of the total Q2 turnover, while the turnover represented 16% of the Q2 turnover to another customer. None of these customers identifies the submission, who only refer as “customer A” and “customer B.”
During the first half of the tax year, Nvidia says that customer A and customer B respectively 20% and 15% of the total income. Four other customers accounted for 14%, 11%, another 11%and 10%of the Q2 turnover, says the company.
In his submission, the company says that these are all “direct” customers – such as original equipment of equipment (OEMs), system integrators or distributors – who buy their chips directly from Nvidia. Indirect customers, such as cloud service providers and internet companies for consumers, buy NVIDIA chips from these direct customers.
In other words, it sounds unlikely that a large cloud provider such as Microsoft, Oracle, Amazon or Google can be secretly customer A or customer B – although those companies may be indirectly responsible for those enormous expenses.
Nicole Kress, Chief Financial Officer of Nvidia, even said that “big cloud service providers” accounted for 50% of Nvidia’s data center incomewhich in turn represented 88% of the total turnover of the company, according to CNBC.
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What does this mean for the future prospects of Nvidia? Gimme Credit analyst Dave Novosel told Fortune That “, although” income concentration among such a small group of customers is a significant risk “, the good news is that” these customers have abundantly cash at hand, generate huge amounts of free cash flow and are expected to spend richly on data centers in the coming years. “
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