Nvidia's AI Chip Demand Set to Soar: Citigroup Raises TAM Forecast to $563 Billion by 2028

Citigroup analyst Atif Malik has revised his outlook for Nvidia's data center semis AI TAM, projecting a 13% increase to $563 billion by 2028. The boost stems from stronger-than-expected demand from sovereign AI initiatives and a 32% jump in networking TAM to $119 billion. Malik has also raised Nvidia's data center sales forecasts for FY2027 and FY2028 by 5% and 11%, respectively, driven by strong sovereign AI demand and growing compute needs.

Citigroup analyst Atif Malik has revised his outlook for Nvidia's data center semiconductor AI total addressable market (TAM), projecting a 13% increase to $563 billion by 2028. The boost stems from stronger-than-expected demand from sovereign AI initiatives and a 32% jump in networking TAM to $119 billion [1].

Malik has also raised Nvidia's data center sales forecasts for FY2027 and FY2028 by 5% and 11%, respectively, driven by strong sovereign AI demand and growing compute needs [1]. The analyst expects Nvidia to report higher revenues from compute and networking going forward, with networking sales projected to increase by 12% for FY27 and 27% for FY28, contributing 20% to total data center revenue [1].

The revised price target for Nvidia's stock (NVDA) has been lifted to $190, suggesting a 19.2% upside potential from current levels [1]. Malik's projections indicate a solid growth in the TAM for AI data center semiconductors, attributed to higher-than-anticipated sovereign demand [1].

Malik's success rate on NVDA stock recommendations stands at 84%, with an average return per rating of 81.96% [1]. His optimistic outlook on Nvidia is supported by the company's involvement in nearly every national-level AI infrastructure project globally, positioning itself as a key supplier for governments seeking to build independent AI capabilities [3].

Despite the positive outlook, Malik urges investors to remain mindful of potential risks, including the possibility of renewed U.S. restrictions on chip exports to China and broader geopolitical uncertainties [3].

References:

[1] https://www.tipranks.com/news/citis-top-analyst-lifts-nvidias-price-target-citing-expanding-ai-tam
[2] https://www.investopedia.com/nvidia-stock-gets-price-target-bump-from-citi-on-sovereign-ai-demand-surge-11767497
[3] https://www.mitrade.com/insights/shares-analysis/us-stocks/tradingkey-NVDA-202507081134