Citi Raises NVIDIA Target Price to $190, Forecasts Expanding AI Market to $563B by 2028

Citi has raised its target price for NVIDIA from $180 to $190, driven by the expanding AI market potential of $563 billion by 2028. The bank has revised NVIDIA's data center sales projections upward for 2027 and 2028, and expects earnings per share to increase by 6% for 2027 and 21% for 2028. Citi maintains a "buy" rating for the stock.

Citi has significantly revised its price target for NVIDIA (NVDA) stock, raising it from $180 to $190, reflecting the growing potential in the AI market. The bank expects the AI data center market to reach $563 billion by 2028, up from a prior estimate of $500 billion [1]. This upward revision is driven by a surge in sovereign AI demand, which benefits NVIDIA as it is involved in "essentially every sovereign deal" [1].

Citi's analysts project NVIDIA's data center revenue to grow by 5% in fiscal year 2027 and by 11% in fiscal year 2028. Networking sales are projected to surge by 12% and 27%, respectively, indicating a rising demand for high-performance systems that link large AI clusters [2]. Gross margins are expected to continue expanding, normalizing in the mid-70% range by year-end.

The bank also expects earnings per share to increase by 6% for 2027 and by 21% for 2028, maintaining a "buy" rating for the stock. NVIDIA's recent partnerships, such as those with Humain, an AI subsidiary of Saudi Arabia’s sovereign wealth fund, further underscore its central role in the global race to build national AI infrastructure [1].

While there are potential downside risks, such as renewed export restrictions under a potential second Trump administration, the AI gold rush, particularly from public sector buyers, shows no signs of slowing. Citi analysts believe NVIDIA has line of sight to tens of gigawatts of sovereign and enterprise AI factory buildouts over the next few years [2].

References:
[1] https://www.investopedia.com/nvidia-stock-gets-price-target-bump-from-citi-on-sovereign-ai-demand-surge-11767497
[2] https://finance.yahoo.com/news/citi-lifts-nvidias-price-target-on-booming-sovereign-ai-demand-133311040.html