Nvidia, AMD to see massive surge? Citigroup forecasts trillion-dollar AI boom

Citigroup has significantly increased its forecast for AI infrastructure spending, projecting it will reach $2.8 trillion by 2029, primarily driven by hyperscalers investing in data centers and AI capabilities. This massive capital allocation, which also necessitates substantial power capacity, positions Nvidia as the dominant beneficiary due to its leading AI chip technology like the Blackwell series. AMD is also poised for significant revenue growth as it gains market share with its AI GPUs, indicating a profound and sustained boom for key chipmakers.

Analysis

Citigroup has materially upgraded its forecast for the AI infrastructure market, now projecting a total spend of $2.8 trillion by 2029, a notable increase from its previous $2.3 trillion estimate. This accelerated capital deployment is primarily driven by hyperscalers like Microsoft, Amazon, and Google, who are heavily investing to expand their AI capabilities and data center footprints. The scale of this build-out is substantial, requiring an estimated 55 gigawatts of new power capacity globally and a capital investment of $1.4 trillion in the U.S. alone, with companies reportedly taking on significant debt to finance this expansion. Nvidia remains the dominant force in this market, with its forthcoming Blackwell series solidifying its technological lead and prompting a price target increase to $210 from Citi based on strong enterprise and government demand. Concurrently, AMD is establishing itself as a credible competitor, securing key clients such as Amazon and Meta for its AI GPUs and is projected to see a sharp increase in AI-related revenue. However, analysts remain cautiously optimistic on AMD, factoring in headwinds from export restrictions and intense competition.

Key Decisions for Investors

• Investors should consider Nvidia (NVDA) the primary vehicle for exposure to the AI infrastructure boom, given its market dominance, technological superiority confirmed by the Blackwell series, and strong demand signals cited in the analyst upgrade.
• AMD represents a compelling secondary play with significant growth potential, but positions should be managed with an awareness of competitive pressures and regulatory risks; monitor its ability to convert client wins into sustained market share gains.
• Closely track the capital expenditure plans and balance sheet health of major hyperscalers (MSFT, AMZN, GOOGL), as their sustained ability to fund the projected AI build-out underpins the entire investment thesis for semiconductor suppliers.
• The massive power requirement of 55 gigawatts creates an adjacent investment theme, suggesting a need to evaluate opportunities in power generation, utility, and electrical infrastructure companies that will enable this technological expansion.