Nvidia's stock can run higher as Citi analysts find plenty of reason for optimism

By Britney Nguyen

Citi is increasingly upbeat about the AI spending landscape looking out several years, and positive on Nvidia's roadmap

Citi analysts raised their price target for Nvidia's stock on Tuesday from $200 to $210.

As artificial-intelligence infrastructure investments pick up, Nvidia Corp. stands to benefit in a big way, according to Citi analysts.

They're feeling "incrementally positive" about Nvidia's (NVDA) roadmap and competitiveness with its Rubin CPX graphics processing unit that was introduced earlier this month, following recent meetings with the company's management team. CPX is slated to follow Vera Rubin, which is expected to come out in the latter half of next year, but the analysts noted that Nvidia remains on a one-year product cadence.

Nvidia's stock closed Monday at $181.85, but the Citi team led by Atif Malik lifted its price target to $210 from $200 in the latest note, with the new target implying more than 15% upside potential.

See more: Why Nvidia's $100 billion investment in OpenAI signals a major transformation

In a separate Citi note on Tuesday, a different team of analysts led by Heath Terry said conversations with industry executives "reflect a similar increase in urgency around adoption at the enterprise level," leading them to raise their forecast for hyperscaler AI capital expenditures in 2026. They now expect $490 billion versus $420 billion, making for a 24% projected growth rate that's above the current consensus of 20%, the analysts said. They're similarly upbeat over a multiyear period, boosting their 2029 estimates to $2.8 trillion from $2.3 trillion.

"We continue to expect providers across semis, hardware and other infrastructure to benefit from this accelerating pace of investment, along with the hyperscalers building ahead of visible enterprise demand and increasing consumption at the data layer," the analysts said.

Meanwhile, Malik said he and his team don't anticipate that Nvidia's recent investments in OpenAI and Intel Corp. (INTC) will have an impact on its product roadmap. With OpenAI's user base and need for computing power growing, the company "has challenges when it comes to securing data centers, land and power and needs support," the analysts said. They noted that Nvidia said it is not giving OpenAI preferential treatment or pricing, and that the bank is waiting for more details on the investment.

Read: Intel's stock is soaring. Here's why Nvidia is investing $5 billion in the chip maker.

The analysts also don't see Nvidia's chip-making partnership and $5 billion investment in Intel's common stock disrupting product plans, or its relationship with chip designer Arm Holdings PLC (ARM), which competes with Intel's x86 computer architecture.

"Nvidia is giving customers more options with x86," the analysts said, and Nvidia has the networking systems to connect Intel's central processing units with its GPUs. Combining Intel's server CPUs with Nvidia's GPU platform should deliver better x86 performance, the analysts said, adding that they see it being useful for high-frequency financial-services applications.

However, the analysts noted that Nvidia's collaboration with Intel is only for products and does not include Intel's struggling foundry business.

"If Intel becomes a credible and competitive foundry, Nvidia said it would consider it," the analysts said.

The analysts led by Terry pointed in their note to Nvidia's recent deals as an example of "the increase in scale of infrastructure and the pacing of investment that's required to support enterprise demand for AI services and AI lab demand for training capacity."

Citi estimates that AI computing demand will add 55 gigawatts of global power capacity by the end of the decade, translating to $2.8 trillion in incremental AI compute spending. Half of that, the analysts said, is expected to come from the U.S.

-Britney Nguyen

This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

09-30-25 1134ET