Nvidia's stock just got a more bullish endorsement from Citi — but here's one fresh risk

Citi Research analyst Atif Malik raised Nvidia's price target to $190 from $180, implying a potential 20% upside, citing an expanded total addressable market for data-center AI chips to $563 billion by 2028 and the burgeoning opportunity in sovereign AI infrastructure buildouts. While bullish on Nvidia's revenue growth and gross margin recovery, Malik highlighted a fresh risk from potential U.S. restrictions on AI chip shipments to Southeast Asia, though he views this as a modest concern given Nvidia's tracking capabilities. Nvidia shares were down 0.7% in Monday afternoon trading.

Analysis

A Citi Research analyst has reinforced a bullish outlook on Nvidia Corp. by increasing the price target to $190 from $180, implying a potential 20% upside. This optimism is predicated on an expanded total addressable market (TAM) for data-center AI chips, now estimated at $563 billion by 2028, up from a prior projection of $500 billion. A significant near-term catalyst identified is the rapid growth of 'sovereign AI,' which could add billions to Nvidia's revenue in 2025 alone, with the company reportedly involved in nearly every sovereign deal. Furthermore, the analysis projects a recovery in adjusted gross margins to the mid-70% range by the end of the fiscal year as the transition to the new Blackwell platform matures. Despite this positive view, a new geopolitical risk has been flagged: potential U.S. restrictions on AI chip shipments to Southeast Asian countries like Malaysia and Thailand to prevent smuggling to China. While the analyst deems this a "modest risk" due to Nvidia's GPU tracking capabilities, it introduces a fresh point of uncertainty for the company's supply chain and regional sales.

Key Decisions for Investors

• The updated price target and expanding TAM estimate for AI chips strengthen the long-term growth narrative, suggesting investors may view any short-term dips as potential buying opportunities, especially given the strong sovereign AI demand pipeline.
• Investors should closely monitor developments in U.S. trade policy regarding potential chip shipment restrictions to Southeast Asia, as this represents a new geopolitical headwind that could impact revenue and supply chain logistics if enacted.
• Pay close attention to Nvidia's upcoming earnings reports for confirmation of gross margin recovery to the mid-70% range, as this is a key indicator of the successful and profitable ramp-up of the new Blackwell product line.