Investor Steve Eisman states that Nvidia Corp. (NASDAQ:NVDA) faces “concentration risk” because five customers account for 70% of the company’s accounts receivable, based on data from its recent 10-Q filing.
Concentration Risk in AI
Eisman, a former Frontpoint partner, discussed his outlook on the artificial intelligence sector with former partner Danny Moses on an episode of “The Real Eisman Playbook” podcast.
During the discussion, Eisman clarified his stance on the sector, stating, “I’m not going out telling people to short the whole AI trade. I think that would be insane.” However, he specified that “one of the things that work concerns me is the concentration risk.”
Nvidia’s 10-Q Filing Data
Eisman noted that while Nvidia recently reported a 106% revenue increase, the company’s subsequent 10-Q filing showed “that 70% of Nvidia’s accounts receivable is from five accounts.”
According to Nvidia’s Form 10-Q for the quarter ended July 26, five unnamed direct customers accounted for 22%, 14%, 13%, 11%, and 10% of the accounts receivable balance.
To illustrate his point, Eisman recounted a story about a former software analyst who refused to take a fast-growing company public because it relied on only three customers.
Comparing this to Nvidia, Eisman stated, “Nvidia is the largest company in the world and 70% of its of its revenue comes from five customers.” He concluded by reiterating, “There’s a lot of there’s just a tremendous amount of concentration risk.”
Broader Industry Reliance
Beyond Nvidia’s specific customer concentration, Eisman expressed concern regarding the broader artificial intelligence sector’s dependence on specific private firms.
He stated that “so much of this whole chain is dependent upon the health of OpenAI and Anthropic.” Eisman added that it is impossible to handicap this reliance because “we don’t even have any financials at this point.”
Moses added that the reliance on AI growth is a “national security issue in the sense of the economy,” noting that it contributes a massive amount of growth to GDP.
How Has NVDA Performed in 2026?
The stock was higher by 18.49% over the last year, up 16.40% year-to-date, and lower by 2.33% over the last month. The stock closed up 1.38% at $217.09 on Monday.
Benzinga’s Edge Stock Rankings indicate that NVDA maintains a weak price trend in the short term but a strong trend in the long and medium terms, with a good growth score.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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