Nvidia's Top Two Clients Account for 39% of Revenue: A Risk for Investors?

Nvidia's Q2 2026 revenue was 39% from two unnamed clients, "Customer A" (23%) and "Customer B" (16%). The company's revenue has declined 4% since its latest earnings report. The identities of the clients remain unknown, and their reliance on just a few buyers creates both promise and risk for investors. Nvidia's data center sales made up 88% of its total revenue, with large cloud service providers accounting for 50% of those sales.

NVIDIA Corporation (NVDA) reported its second-quarter (Q2) 2026 earnings, showcasing robust financial performance driven by strong growth in its Data Center and Gaming segments. The company reported revenue of $46.7 billion, a 6% increase from the previous quarter and a 56% year-over-year (YoY) increase. Despite this, the stock price of NVDA fell 3.2% in after-market trading, primarily due to underwhelming Data Center segment revenues [1].

Key highlights of NVIDIA's Q2 2026 earnings include:

- Data Center Segment: Revenue of $41.1 billion, a 5% increase from the previous quarter and a 56% YoY increase. This segment's revenues were $26.2 billion in the prior-year quarter, and the sequential decline of 1% was solely due to the absence of H20 chip sales in China [1].
- Gaming Segment: Revenue of $4.3 billion, up 14% from the previous quarter and 49% YoY. The Blackwell-powered NVIDIA GeForce RTX™ 5060 became the fastest-ramping x60-class GPU ever [1].
- Revenue Composition: Revenue was 39% from two unnamed clients, "Customer A" (23%) and "Customer B" (16%). The company's revenue has declined 4% since its latest earnings report [2].
- Data Center Sales: Made up 88% of its total revenue, with large cloud service providers accounting for 50% of those sales [2].

NVIDIA's management expects quarterly sales to reach $54 billion in the third quarter, with the Zacks Consensus Estimate currently at $52.22 billion. The company believes that the resumption of H20 sales in China could add another $2 to $5 billion in the third quarter [1].

Analysts are divided, with some seeing a buying opportunity and others cautioning against it. The average price target for NVIDIA Corp stands at $207.40, with a potential upside of 19.07% from the current stock price [3].

References:
[1] https://www.tradingview.com/news/tradingview:3ac2d450f026d:0-nvidia-announces-financial-results-for-q2-fiscal-2026/
[2] https://www.ainvest.com/news/nvidia-q2-results-disappoint-data-center-revenue-misses-expectations-china-concerns-2508/
[3] https://finance.yahoo.com/news/buy-nvidia-solid-q2-2026-124200752.html