Nvidia's concentration dependence risk

Concentration Risk & Customer Base - Nvidia's 10Q revealed that 56% of its accounts receivables are from three customers, raising concerns about concentration risk [1] - The concentration may be structural or temporary, influenced by factors like sovereign AI projects and software optimization [4] - The diversification of Nvidia's customer base is crucial, especially as cloud providers potentially reach full capacity [7][8][9] Market Dynamics & Demand - Hyperscalers are currently aggregators of demand, giving customers access to chips, but this may not last [6] - Cloud providers account for roughly 50% of data center sales, indicating a broadening customer base [3] - Massive pent-up demand exists from sovereign AI projects waiting for GPUs [4] Financial Performance & Future Outlook - Blackwell revenue is hitting all customer categories [3] - Cloud providers may face shareholder scrutiny regarding return on investment as they continue to invest [8] - Nvidia needs to diversify its customer base eventually [7]