Nvidia's Sovereign AI Demand Boosts Price Target to $190

Nvidia (NVDA) is a top AI stock with Citi reaffirming its "Buy" rating and raising the price target to $190. The company is involved in nearly every sovereign AI deal, with the analyst anticipating a total addressable market of $563 billion by 2028, up 13% from the prior estimate. Sovereign AI demand is expected to contribute billions of dollars in 2025 and increase in 2026.

Nvidia (NVDA) has received a significant boost from Citi analysts, who reaffirmed their "Buy" rating and raised the price target to $190 per share. The move comes as the company continues to capitalize on the growing demand for sovereign artificial intelligence (AI). Citi expects the AI data center market to reach $563 billion by 2028, up 13% from the prior estimate, primarily driven by higher-than-expected sovereign AI demand [1].

Sovereign AI refers to AI capabilities developed and controlled by a single entity, often a national government. Nvidia is involved in nearly every sovereign AI deal, with Malik, a Citi analyst, noting that sovereign demand is already contributing billions of dollars in 2025 and is expected to increase in 2026 [3]. The company has line of sight to tens of gigawatts (GW) of enterprise and sovereign AI factory buildouts over the next couple of years, with each gigawatt contributing approximately $50 billion in Nvidia sales [3].

Nvidia's involvement in sovereign AI deals is not the only factor driving its growth. The company's data center revenue surged to a record $26.3 billion in Q2 2025, up 154% year-over-year and accounting for 88% of total revenue. This growth is largely driven by its GPU architecture, which is synonymous with AI performance. The Hopper-based H100 and H200 GPUs, along with the upcoming Blackwell architecture, are the engines behind various AI applications, from generative models to enterprise-grade inference systems [2].

Moreover, Nvidia's software stack, including tools like NIM (NVIDIA Inference Microservices) and the AI Foundry, creates a flywheel effect, attracting over 150 companies to integrate NIM into their platforms. The AI Foundry, which provides access to Meta's Llama 3.1 models, has already secured Accenture as its first major partner [2].

Despite the positive outlook, Nvidia faces some challenges, such as supply constraints for its new GPUs and the volatile Chinese market. However, the company's strategic brilliance and ecosystem lock-in position it as a prime candidate to join the $1 trillion market cap club. As the AI revolution accelerates, Nvidia isn't just keeping pace—it's writing the rules.

References:
[1] https://www.investopedia.com/nvidia-stock-gets-price-target-bump-from-citi-on-sovereign-ai-demand-surge-11767497
[2] https://www.ainvest.com/news/nvidia-1-trillion-ambition-riding-ai-tsunami-dominance-semiconductors-2507/
[3] https://ca.finance.yahoo.com/news/nvidia-nvda-involved-nearly-every-125836245.html