Nvidia’s Q2 fiscal 2026 earnings revealed a record US$ 46.7 billion in revenue, driven predominantly by its booming data center operations. However, this stellar performance is partially clouded by significant customer concentration: two unnamed direct buyers, designated Customer A and Customer B, accounted for 39% of the quarter’s sales, with the first one representing 23% alone. The issue raised concerns among investors.
Nvidia’s CFO, Colette Kress, explained that while the bulk of data center revenue stems from large cloud service providers (about 50% of data center revenue, which itself makes up some 88% of total sales), these mystery clients are direct customers, such as OEMs or system integrators, not necessarily the well-known hyperscalers and big techs.
This level of concentration poses a strategic risk. As one analyst noted, depending heavily on just two major buyers introduces potential volatility, if either shifts strategy, Nvidia’s revenue stream could be significantly disrupted. The Q2 filing confirms the concern: such dependence has surged compared to the previous year, when top buyers comprised a much smaller share of revenue, around 14% and 11%.
Why the mistery?
Nvidia’s filings clarify that these unnamed entities are direct customers in its Compute & Networking business, not end-users, so they may be system fabricators or integrators who resell to cloud platforms or tech firms. Still, speculation points toward high‑spend players in AI infrastructure, on account of their recent multi‑billion‑dollar investments in GPU‑driven data center builds. While such clients bring enormous opportunity, the reliance trades off against diversification, particularly if AI hardware demand slows.
Another theory is that the mystery customers could be concentrated in China, a market where Nvidia continues to face political and regulatory headwinds. The US government has tightened export controls on advanced AI chips and taxed the company in 15% to sell to the rival country, aiming to limit Beijing’s access to high-end semiconductors for strategic sectors like defense and surveillance. Disclosing major Chinese buyers could place Nvidia in a politically sensitive position.
What now?
For Nvidia, the central challenge now lies in balancing financial strenght with risk management. The company continues to ride the AI wave: its new Blackwell architecture drove 17% sequential growth in data center hardware. Yet analysts warn of gross margin erosion, dropping below 72% you, as competition intensifies.
Investors are closely watching whether Nvidia can broaden its customer base or at least secure more transparency to sustain growth and goodwill. Analysts caution that without clearer visibility into cloud spending plans for 2026, Nvidia may struggle to find additional drivers for earnings upgrades or fresh catalysts for its share price.
