• Quantum & Chips

Citi Raises Nvidia Price Target to $190 on AI Market Expansion

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By Tech Icons
2:02 pm
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Blackwell GPU chip in a data center setting, symbolizing AI semiconductor growth and infrastructure dominance
Image credits: Nvidia

Nvidia’s AI semiconductor market dominance drives revenue growth as data center demand reaches record heights

Key Takeaways

  • Citi raises Nvidia price target to $190 from $180, citing expanded AI data center semiconductor market opportunity projected to reach $563 billion by 2028.
  • Blackwell product line generates $240 billion in sales, surpassing expected $200 billion with management targeting 75% gross margins by year-end.
  • Nvidia maintains 80% market share in AI accelerators and 92% in data center GPUs, with sovereign AI investments contributing billions in 2025.

Introduction

Nvidia receives a significant vote of confidence from Citi analysts who raised the semiconductor giant’s price target to $190 from $180, driven by an unexpectedly large total addressable market for AI data center semiconductors. The upgrade reflects growing institutional confidence in Nvidia’s strategic positioning within the rapidly expanding artificial intelligence infrastructure sector.

Citi analyst Atif Malik reaffirmed a “Buy” rating on the stock, following CEO Jensen Huang’s keynote at Computex in Taipei. The revision comes as Nvidia continues to dominate the AI semiconductor landscape with revenue growth exceeding 150% in the last twelve months and gross profit margins approaching 76%.

Key Developments

The new valuation anchors on a stable 30x price-to-earnings multiple based on Citi’s revised fiscal year 2028 earnings per share estimate of $6.37. Citi projects the total 2028 AI data center semiconductor market to reach $563 billion, marking a 13% increase from their previous $500 billion estimate.

Sovereign AI investments emerge as a key growth driver, with governments investing billions in AI infrastructure. Malik noted that “sovereign AI investments are already contributing billions of dollars in 2025 and are expected to accelerate in 2026,” adding a stable demand vector alongside hyperscalers and enterprises.

Nvidia’s networking business receives particular attention, with the total addressable market expanding to $119 billion from $90 billion. The company’s data center business anticipates a 12% boost in networking sales for fiscal 2027 and 27% for fiscal 2028, representing approximately 20% of total data center revenue.

Market Impact

Nvidia has reclaimed the title of the world’s most valuable publicly-traded company, surpassing Apple for the third time. The company’s market capitalization stands at $2.9 trillion, making it the largest semiconductor company globally ahead of TSMC, Broadcom, ASML, and Samsung.

The company’s fiscal 2025 revenue reached $130.5 billion, up 114% year-over-year, with GAAP earnings per diluted share increasing 147%. Quarterly revenue in Q3 2025 hit $35 billion, with $30.8 billion generated from data center sales alone.

Nvidia’s Blackwell product line performance exceeded expectations, generating $240 billion in sales compared to the anticipated $200 billion. Management maintains confidence in achieving around 75% gross margins by year-end, demonstrating strong profitability prospects for the product line.

Strategic Insights

Nvidia’s competitive moat remains formidable through its CUDA software ecosystem and advanced GPU architectures, making it the default choice for enterprises deploying AI at scale. The company holds approximately 80% of the AI accelerator market and 92% of the data center GPU market.

Recent product launches including NVLink Fusion interconnect, RTX PRO 6000 Blackwell servers, and Blackwell AI supercomputers represent strategic moves to expand into new AI workloads and verticals. The GB300 processor begins shipping in the third quarter, aligning with Citi’s projections of rolling out around 1 million units by 2025.

Networking emerges as an increasingly important revenue stream, expected to represent 21% of AI data center market by 2028, up from the previous 18% estimate. This reflects growing demands for larger AI training clusters and expanding intra-networking scale-up opportunities.

Expert Opinions and Data

Citi has increased its fiscal 2027 and 2028 earnings per share projections by 6% and 21%, respectively. “Nvidia’s confidence stems from the Blackwell ramp for GB200 and expectations for the GB300 ramp,” Malik stated, highlighting the company’s execution capabilities.

The firm underscores Nvidia’s strong market positioning, noting its involvement in essentially every sovereign deal with visibility to tens of gigawatts in coming years. Despite emerging competition from alternatives like DeepSeek’s R1 large language model, Malik expressed skepticism about claims of cost advantages over Nvidia’s offerings.

Other analysts maintain varied perspectives, with DA Davidson reaffirming a Neutral rating and $135 price target, showing caution over the company’s ability to meet 2026 expectations. Meanwhile, KeyBanc maintains an Overweight rating, suggesting continued positive outlooks among institutional investors.

Conclusion

Citi’s raised price target reflects both Nvidia’s current market dominance and the massive growth opportunities in the AI semiconductor sector. The company’s sustained innovation, robust financial performance, and strategic market position demonstrate its potential to maintain sector leadership despite emerging competitive threats and regulatory challenges.

Nvidia’s ability to capitalize on sovereign AI investments and expanding networking opportunities positions the company favorably for continued growth. The combination of strong execution on product roadmaps and expanding market opportunities supports analyst confidence in the stock’s upward trajectory.

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