36% of Nvidia's $35 Billion in Q3 Revenue Came From Just 3 Mystery Customers
Nvidia (NASDAQ: NVDA) is the world’s leading supplier of graphics processing units (GPUs) for data centers. Demand for the chips, which are used to develop artificial intelligence (AI), is significantly outpacing supply, and that trend is likely to continue for the foreseeable future.
That’s great news because it gives Nvidia incredible pricing power, which translates into massive profits and a higher stock price for investors. It’s a key reason the company has added more than $3 trillion to its market value over the last two years alone.
However, there is a risk brewing beneath the surface of this cash-generating machine. During its fiscal 2025 third quarter (ended Oct. 27), more than one-third of Nvidia’s total revenue came from just three customers. If those customers pull back on their AI spending, the company’s powerful sales growth could grind to a halt.
Very few companies can afford to build AI data centers
Nvidia recently launched its new Blackwell GPU architecture, which offers a significant leap in performance from the previous Hopper architecture. Blackwell-based systems like the GB200 NVL72 can perform AI inference at 30 times the speed of the equivalent H100 system, which empowers developers to deploy bigger, more advanced large language models (LLMs).
However, one GB200 GPU within the NVL72 system costs over $80,000, and the most powerful AI models could require over 100,000 of them. Very few companies can afford to spend billions of dollars building data center infrastructure of that size. As a result, a handful of tech giants including Microsoft, Amazon, and Oracle are the biggest buyers of Nvidia’s GPUs.
They use them to develop their own AI models, but they also rent the computing power to developers at scale. It has become a very profitable business for them, and it benefits the developers who can access computing capacity without fronting billions to build it themselves. Naturally, this is also a big win for Nvidia.
With all of that said, affordability is improving with each new generation of GPU. A single H100 costs around $40,000, so even though a GB200 is twice as expensive, the 30-fold increase in inference performance makes it a huge net win for the end user. Still, it could be years before it’s economically viable for the average company to build its own infrastructure.
That’s why Nvidia faces concentration risk
Nvidia generated a record $35.1 billion in total revenue during its fiscal 2025 third quarter, which was a 94% increase from the year-ago period. The majority of that revenue ($30.8 billion) was attributable to the data center segment, which accounts for its AI GPU sales.
According to the company’s 10-Q filing for the third quarter, three unidentified customers accounted for 36% of its $35.1 billion in total revenue:
|
Proportion Of Nvidia’s Q3 Revenue |
|
|---|---|
|
Customer A |
12% |
|
Customer B |
12% |
|
Customer C |
12% |
Data source: Nvidia.
In the fiscal 2025 second quarter three months earlier, four customers provided 46% of Nvidia’s total revenue, so it appears sales were less concentrated in the third quarter. However, the company only singles out the customers that account for 10% or more of its revenue, so there were likely other material buyers of its GPUs that didn’t meet the reporting threshold in the recent quarter.
For instance, we know there was a fourth customer that represented 12% of the total revenue over the last nine months but fell below the 10% threshold for the third quarter specifically. Therefore, there’s a chance that third-quarter revenue concentration only changed by a couple of percentage points compared to the second quarter.
Here’s why that’s a concern: Customers B and C have each spent $10 billion with Nvidia over the last three quarters alone, and only a small number of companies in the entire world can afford to sustain that level of spending on AI infrastructure and chips. If even one of them decides to cut back, Nvidia will suffer a loss in revenue that will be very difficult to replace, thus potentially denting the company’s incredible run of growth.
Nvidia headquarters in Santa Clara, California. Image source: Nvidia.
What are Nvidia’s mystery customers?
Microsoft is a consistent buyer of Nvidia’s GPUs, and it’s reportedly the undisputed No. 1 buyer of the new Blackwell GB200, which just started shipping. Therefore, it’s almost certainly one of the chipmaker’s top three customers.
Some combination of Amazon, Alphabet, Oracle, Meta Platforms, and OpenAI likely fill the other spots. Based on public filings, here’s how much some of those companies are allocating to capital expenditures (capex), most of which relates to AI infrastructure:
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Microsoft spent $20 billion on capex during its fiscal 2025 first quarter (ended Sept. 30), which followed $55.7 billion in spending during fiscal 2024.
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Amazon says it’s on track to spend $75 billion in the calendar year 2024 to support its efforts in AI.
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Alphabet will have spent over $50 billion on capex in 2024 once the year is over.
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Meta Platforms recently told investors it’s on track to spend up to $40 billion on AI infrastructure this year, with an even higher number earmarked for 2025.
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Oracle will provide a capex update in December, but Nvidia revealed the company is buying at least 131,000 Blackwell GPUs.
Morgan Stanley estimates that Microsoft, Amazon, Alphabet, and Meta alone will spend a combined $300 billion on AI infrastructure in 2025, so Nvidia’s sales pipeline looks rock solid for at least the next year. However, the longer-term picture is a little less clear, because it’s unlikely those companies can maintain such a high rate of spending in perpetuity.
In fact, all four of those companies have designed their own chips in an effort to reduce costs. Nvidia has a lengthy head start, so it could take years before those tech giants can build a comparable product. However, it represents a key risk in the future since those companies represent such a huge chunk of Nvidia’s revenue.
None of this is an immediate threat to the chipmaker, but investors should definitely keep an eye on how its top customers plan to allocate their capex beyond 2025. That will be the earliest indication of whether this chip powerhouse can maintain its incredible run of growth.
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John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool’s board of directors. Anthony Di Pizio has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet, Amazon, Meta Platforms, Microsoft, Nvidia, and Oracle. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.