Citi lifts Nvidia's price target on booming sovereign AI demand
The firm raised its price target on the chipmaker to $190 per share, implying a roughly 15% upside from Nvidia's current trading levels. Citi analysts said they see Nvidia capturing a larger piece of an expanding total addressable market (TAM) for data center infrastructure. The upgrade comes as Nvidia continues its charge toward a $4 trillion market cap, with shares up 12% in the past month.
"We believe sovereign demand is already contributing up to billions of dollars in 2025" and should ramp up further in 2026, analysts Atif Malik and Papa Sylla wrote. Nvidia is involved in "essentially every sovereign deal," the note said, making the company central to the global race to build national AI infrastructure.
The firm raised its 2028 AI compute TAM estimate to $563 billion, up 13% from $500 billion, and networking TAM to $119 billion, up from $90 billion, expecting sharp sales increases for Nvidia.
Citi noted that at Nvidia's recent Generative AI conference, participants discussed a possible benchmark for AI infrastructure: one supercomputer or 10,000 GPUs per 100,000 employees, a ratio that could drive massive enterprise and government buildouts.
Nvidia, whose Blackwell GB200 chips power many of these AI clusters, is already seeing accelerating deployment, according to Citi. Concerns about potential bottlenecks in Nvidia's supply chain have also eased, with Citi reporting that rack buildouts are happening "at a rapid pace." As the company prepares for its next-gen GB300 chips, analysts expect a smooth transition, crediting lessons learned from earlier platform shifts.
Citi now expects Nvidia's data center revenue to grow 5% in FY 2027 and 11% in FY 2028. Networking sales are projected to surge by 12% and 27%, respectively. This represents a 20% attach rate, indicating a rising demand for high-performance systems that link large AI clusters. Gross margins are also forecast to continue expanding, normalizing in the mid-70% range by year-end.
Still, the bank flagged downside risks, including renewed export restrictions under a potential second Trump administration. Bloomberg recently reported that Malaysia and Thailand could face scrutiny for suspected shipments to China.
For now, though, the AI gold rush — especially from public sector buyers — shows no signs of slowing.
"Nvidia has line of sight to tens of gigawatts of sovereign and enterprise AI factory buildouts over the next few years," Malik and Sylla wrote.
Francisco Velasquez is a reporter for Yahoo Finance. He can be reached on LinkedIn and X.

Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yahoo
17 minutes ago
- Yahoo
The Democratic Party's Brand Is Cooked
Voters have increasingly little faith in the Democrats, a new Wall Street Journal poll found, with the party reaching its lowest favorability rating in more than three decades. Voters overwhelmingly believe that Republicans are better able to handle key issues in Congress than Democrats. The survey found that the majority of voters, 63 percent, have an unfavorable view of the Democratic Party. Only 33 percent hold a favorable view. This is the most unpopular that Democrats have been according to Journal polls dating back to 1990. As President Donald Trump enacts an increasingly authoritarian agenda and provides little economic benefit to the average American, Democrats are hopeful anti-Trump backlash will give them a strong showing in the 2026 midterm election. While slightly more people expect to vote for Democrats next year than Republicans, according to the Journal poll, Democrats' overall favorability has only dropped since Trump took office. 'The Democratic brand is so bad that they don't have the credibility to be a critic of Trump or the Republican Party,' John Anzalone, a Democratic pollster who worked on the survey, told the Journal. 'Until they reconnect with real voters and working people on who they're for and what their economic message is, they're going to have problems.' Anzalone's firm, which consulted for both President Joe Biden and Vice President Kamala Harris' presidential campaigns, worked on the survey with Trump pollster Tony Fabrizio. According to the survey, voters think Republicans in Congress are more capable at handling the economy, inflation and rising prices, tariffs, immigration, 'illegal' immigration, the Russia-Ukraine war, and foreign policy. On the topic of 'illegal' immigration, 48 percent have their faith in Republicans and 24 percent choose Democrats. Democrats scored higher on health care and vaccine policy. Both parties tied at 37 percent on the issue of looking out for middle class families. 'As much as I fully believe that Democrats are not doomed for all eternity, I also believe that many Democrats aren't quite grappling with the serious credibility problems the party still faces,' Democratic operative Tré Easton posted on X. 'The podcasts and everything are real cute, but we've got work to do.' Democrats also scored low in a Quinnipiac poll released earlier this month. In that survey, approval of congressional Democrats reached a new low of 19 percent, with 72 percent of voters saying they disapproved. 'This is a record low since March 2009 when the Quinnipiac University Poll first began asking this question of registered voters,' the university wrote. The Quinnippiac poll found that even registered Democrats disapproved of the party: Thirty-nine percent approved of how Democrats in Congress were handling their jobs, while 52 percent disapproved. Among registered Republicans, 77 percent approved of how Republicans are operating in Congress. In the findings from the Journal, voters are mixed on Trump. About half, or 55 percent, of voters say the country is headed in the wrong direction. This is down from 70 percent in January, meaning voters have become more optimistic since Trump took office, yet Trump is not wildly popular. He has a favorability rating of 45 percent, and an unfavorability rating of 52 percent. A total of 46 percent approve of what Trump is doing as president, and 52 percent disapprove. Fifty-three percent disapprove of Trump's handling of the economy, while 44 percent approve. On the issues of inflation, tariffs, immigration, looking out for middle class families, health care, vaccine policy, foreign policy, and the Russia-Ukraine war, voters disapprove of the job Trump is doing. On the topic of 'illegal' immigration, though, 51 percent approve and 49 percent disapprove. The Republican Party is not wildly popular either, though, with 54 percent of voters having an unfavorable view, compared to the 43 percent who have a favorable view. More from Rolling Stone Trump Claims Someone May Have Forged His Signature on Birthday Letter to Epstein I Worked With Stephen Colbert. Here's Why His Cancellation Should Scare You Yes, America Is an Oligarchy Best of Rolling Stone The Useful Idiots New Guide to the Most Stoned Moments of the 2020 Presidential Campaign Anatomy of a Fake News Scandal The Radical Crusade of Mike Pence
Yahoo
17 minutes ago
- Yahoo
Blues Have Big Move To Make With Breakout Forward
The St. Louis Blues' decision to tender an offer sheet to forward Dylan Holloway this past off-season undoubtedly proved to be a great decision. After the Edmonton Oilers elected not to match the Blues' two-year, $4,580,914 offer sheet for Holloway, he broke out in a major way in his first season with St. Louis.


Bloomberg
19 minutes ago
- Bloomberg
Union Pacific Is Said to Near Deal for Norfolk Southern
By , Ryan Gould, and Kiel Porter Save Union Pacific Corp. could reach an agreement to acquire Norfolk Southern Corp. and create a transcontinental rail behemoth as soon as early next week, people familiar with the matter said. The deal, which would be the largest deal ever in the rail industry, is likely to include both cash and stock, according to the people, who asked not to be identified discussing confidential information.