Nvidia's Data Center segment posted $89 billion in revenue last quarter, beating a $85.8 billion forecast, as its smaller ACIE business grew faster than its handful of hyperscaler customers. The results address a long-running investor concern over customer concentration, even as those same hyperscalers keep designing their own chips.
Nvidia's Data Center segment reached $89 billion in revenue last quarter, beating a $85.8 billion forecast, with CFO Colette Kress noting that hyperscale revenue more than doubled. The company's newer AI clouds, industrial, and enterprise segment, or ACIE, surged 138%, growing faster than the concentrated hyperscaler group Nvidia has leaned on most heavily.
The result answers what CNBC has reported as Nvidia's biggest lingering investor concern: that the company draws an outsized share of revenue from a handful of hyperscalers — Amazon, Google, and Microsoft — along with major buyers Meta and SpaceX. In May, Nvidia began splitting its data center reporting into hyperscalers versus ACIE, and in the first quarter the two segments were nearly even, at $37.9 billion for hyperscalers and $37.5 billion for ACIE, with ACIE growing 31% versus a slower pace for hyperscalers.
Huang calls hyperscalers the easiest sale
CEO Jensen Huang has framed the concentration as a choice rather than a limit. According to CNBC, Huang said hyperscalers are Nvidia's simplest customers to court "because there are only five or six of them", versus the roughly 250,000 companies in the broader industry Nvidia hopes to reach. Even so, hyperscalers have continued purchasing GPUs in bulk even as their own capital spending squeezes their free cash flow.
Custom chips and hedge fund positioning
Each of those hyperscalers is designing its own chips to reduce reliance on Nvidia, and Bernstein analyst Stacy Rasgon told CNBC that recent financing announcements produced a lot of headlines and big numbers without details on how the plans will work. If hyperscaler cost pressure eventually forces spending cuts, Nvidia's largest revenue source would be directly exposed.
Hedge fund ownership of Nvidia has kept climbing regardless. Insider Monkey's database shows Nvidia was held by 285 hedge funds in the second quarter of 2026, up from 275 in the first quarter, with holdings valued at $94.67 billion. AMD, the chipmaker most often cited as Nvidia's closest rival, was held by 164 funds, up from 134, with holdings worth $23.58 billion.
Source: Insider Monkey
Trading involves risk.
Risk Disclaimer
