Citigroup Maintains NVIDIA Buy Rating, US$300 Target Price, with Incremental Catalysts from CPUs and AI Data Centers

Overview

This is a Citigroup company research and earnings review report on NVIDIA Corp. The report focuses on NVIDIA's Apr-Q results, Jul-Q guidance, AI data center demand, Vera CPU, Blackwell and Rubin product cycles, inference market expansion, and the upward revision to data center semiconductor TAM. Citigroup maintains a Buy rating and a US$300 target price on NVIDIA.

Core views

The core view is that NVIDIA remains in the dominant position in AI infrastructure expansion. Apr-Q results were better than expected on strong AI demand, and data center sales and networking continued to beat expectations. NVIDIA plans to disclose more CPU segment detail; Vera CPU sales are expected at about US$20 billion this year and create a standalone ~US$200 billion CPU TAM by 2030. The report believes the previous more than US$1 trillion data center sales opportunity for 2025-2027 did not include Vera CPU and LPX contributions, so the new information lifts future earnings estimates. NVIDIA also believes the inference and token markets are exploding rapidly, and performance-per-watt and performance-per-token metrics will support share gains among AI model companies such as OpenAI and Anthropic.

Analysis framework

The report analyzes quarterly results, company guidance, segment trends, product cycles, TAM updates, and valuation framework. On the earnings side, it compares Apr-Q revenue, gross margin, expenses, and EPS against Citigroup and market expectations; on the business side, it breaks out data center, AI GPU, networking, edge computing, automotive, robotics, and gaming; on the long-term side, it updates assumptions for AI accelerators, data center semiconductors, and CPU TAM; and on valuation, it uses roughly 28x C27E EPS to derive the target price.

Methodology notes

• Valuation methodsP/E valuation

  P/E multiple on forward EPS

  Citigroup's US$300 target price is based on roughly 28x C27E earnings power of about US$11.9 and discounted back to the present; the multiple is broadly in line with the three-year average.

• Earnings reviewActual results versus expectations

  results versus guide and expectations

  The report compares Apr-Q actual results with company guidance, Citigroup forecasts, and market expectations, and updates future quarterly and annual models accordingly.

• Market sizeTAM analysis

  total addressable market

  The report raises assumptions for AI accelerators, CPUs, and data center semiconductor market size, and believes the 2028 data center semiconductor TAM could reach about US$1 trillion.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• NVIDIA CORP / US.NVDA

  The report's core covered name; Citigroup maintains a Buy rating and a US$300 target price.

  Strengths

  Strong AI data center demand, good progress in Blackwell deployment, Rubin advancing on schedule, Vera CPU adding incremental TAM, networking supported by Spectrum-X and InfiniBand demand, and inference market share likely to keep expanding.

  Weaknesses

  Gaming is affected by seasonality and supply allocation, while consumer demand is pressured by rising memory and system prices; China data center sales are constrained by US export controls.

  Comparison

  The report believes NVIDIA can still capture the majority of AI accelerator investment thanks to its technology leadership and large installed base; ASIC unit growth is faster, but because merchant GPUs have materially higher ASPs, they still account for a relatively high share of sales.

  Risks

  Competition, slower-than-expected platform adoption, volatility in automotive and data center markets, crypto mining effects on gaming sales, export controls, supply constraints, pricing pressure, and macro risks.

• META PLATFORMS INC / US.META

  Mentioned as a potential customer or source of demand for NVIDIA's Vera CPU.

  Strengths

  Large-scale AI and cloud infrastructure investment could support demand for NVIDIA-related products.

  Weaknesses

  The report does not analyze META's own fundamentals or valuation.

  Comparison

  META is not a covered name in this report and appears only as a customer lead related to NVIDIA CPU and AI infrastructure demand.

  Risks

  No independent investment conclusion is provided for META.

Key data

• RatingBuyCitigroup maintains a Buy rating on NVIDIA.
• Target priceUS$300.00Based on roughly 28x C27E EPS valuation.
• Current priceUS$223.47The report table shows the price as of 2026-05-20 16:00.
• Expected share price return34.2%Expected total return is 34.3%, with dividend yield at 0.0%.
• Market capUS$5,412,561MFrom the valuation table on the front page of the report.
• Apr-Q data center sales growth21% Q/QAbove Citigroup's 20% estimate and the market's 17% estimate.
• Apr-Q non-GAAP gross margin75%Including SBC, in line with Citigroup's expectations.
• Apr-Q non-GAAP EPSUS$1.87Up 21% q/q and 150% y/y, including SBC.
• Jul-Q revenue guidanceUS$91BUp 12% q/q and 85% y/y, above Citigroup and the market's pre-result expectations of about US$88 billion.
• FY2027 unit forecast11.7M unitsRaised from the prior 11.2M, implying 65% y/y growth.
• FY2027 AI GPU sales forecastUS$281BBlackwell and Rubin combined sales are expected to be about US$270 billion.
• 2028 data center semiconductor TAMUS$1T27% above the prior US$851 billion forecast.

Impact & implications

The report is positive for NVIDIA stock. In the short term, the better-than-expected Apr-Q results and strong Jul-Q guidance reinforce the view that AI data center demand remains strong; in the medium term, high-volume Blackwell shipments and Rubin production shipments starting in 3Q and ramping in 4Q help extend the product cycle; in the long term, Vera CPU, networking, inference, and physical AI expand NVIDIA's addressable market. Risks include China data center sales being affected by export controls, supply chain bottlenecks, competition, pricing pressure, and macro uncertainty.

Risks

• Competition in gaming could cause NVIDIA to lose market share and pressure the stock.
• Slower-than-expected adoption of new platforms could weigh on data center and gaming sales.
• Volatility in automotive and data center markets could increase stock and valuation-multiple volatility.
• Changes in crypto mining-related demand could affect gaming sales.
• US export controls limit China data center sales, and the H200 delivery timeline or a framework for re-entering China are important variables.
• Wafer, CoWoS, and HBM supply chains remain key bottlenecks; although the company has pre-bought capacity, it is not immune to supply challenges.
• AI infrastructure TAM could be lower than expected due to competition, pricing pressure, or macro risks.

What to watch

• More details on Vera CPU from NVIDIA at Computex.
• The H200 chip delivery timeline and the framework for re-entering the China market.
• Execution of Rubin production shipments starting in 3Q and ramping in 4Q.
• The rollout pace of Blackwell and GB300 deployments, and the impact of high-volume shipments on gross margin.
• Whether performance-per-token and performance-per-watt metrics continue to strengthen NVIDIA's share in the inference market.
• Incremental capacity demand from AI labs, neoclouds, sovereign AI, and enterprise customers.
• Constraints from memory prices, HBM, CoWoS, and wafer supply on gross margin and shipments.
• Growth contributions from gaming, automotive, robotics, and edge computing.