Nvidia Stock Jumps as Citi Predicts Soaring AI Capex
Did you know that global spending on AI is expected to reach over $300 billion by 2026? That’s huge and guess who’s right at the center of it? Nvidia stock.
Recently, Nvidia’s stock saw a strong jump. Why? A fresh report from Citi predicted that AI companies are about to spend even more money a lot more on building powerful systems. And Nvidia is one of the biggest winners in this race.
We all know AI is taking over industries from healthcare to finance to education. But what we often miss is how much money companies are pouring into the tech behind it. And that’s where Nvidia plays a key role.
Let’s explore why Citi’s prediction is such a big deal, how Nvidia fits into this booming AI world, and what this means for investors like us.
Citi’s Forecast: What Sparked the Rally?
Recently, Citi analysts gave Nvidia a boost by raising their price target to $190, up from $180. They pointed to rapidly growing demand for sovereign AI that is, AI systems built and run by governments, not just big tech firms. Citi now expects the AI data center chip market to reach $563 billion by 2028.
Critics once fretted about slower tech spending. But with nations investing in sovereign AI, demand for Nvidia chips is expected to stay strong. Citi’s upbeat prediction helped Sophia investors believe Nvidia’s chip sales will rise fast in coming years. Citi still ranks Nvidia as a Buy.
Nvidia’s Role in the AI Ecosystem
Nvidia is a key part of the AI revolution. Its H20 and Blackwell GPU chips power training and inference tasks in data centers around the world. Nvidia also offers the CUDA software platform, used by millions of developers to build AI models.
Governments in the UK, Germany, France, and Saudi Arabia are launching sovereign AI projects. Nvidia is involved in almost all of them. That helps reinforce its dominance in hardware and infrastructure.
We often forget how central Nvidia is beyond servers. Their chips support hospitals, factories, and research labs. As nations build their own AI systems, Nvidia stands to gain even more.
Market Reaction and Stock Performance
Nvidia stock has climbed sharply. In the past week, shares hit a record near $183, driven by strong AI spending news from Microsoft and Meta.
Although shares dipped slightly on tariff concerns from the U.S. and Canada, they remain elevated around $180 as of early August 2025. The overall sentiment is strong. Investors see Nvidia as a winning AI bet even amid tensions and volatility.
AI Capex Boom: Who Else is Spending?
Tech giants like Microsoft and Meta are ramping up spending big. Microsoft upped its cloud‑focused capital budget to over $30 billion, while Meta revised its 2025 capex to between $66-72 billion, with hints of even more in 2026.
These companies will likely buy huge volumes of Nvidia GPUs. Amazon and Google also keep expanding their AI infrastructure. That spending helps drive Nvidia’s chip sales. Governments joining the capex boom add another layer of demand.
Risks and Challenges
There are still risks to consider. Citi had cut Nvidia’s previous price target to $150 earlier in 2025. That cut came from concerns over slower spending by hyperscalers like Microsoft, which trimmed data center plans. GPU sales forecasts were lowered by 3% in 2025 and 5% in 2026.
Trade tensions and tariffs also add uncertainty. U.S. restrictions on chip exports to China have loosened, but new policy risks remain like possible bans on shipments to Southeast Asia.
Competition is rising too. Companies such as AMD continue to push their own AI chips, and cloud firms like Amazon and Google roll out custom silicon.
Analyst Views and Investor Outlook
Many analysts remain bullish despite short‑term dips. Citi raised its target to $190 and still rates Nvidia a strong Buy. Morgan Stanley, Motley analysts, and others also offer high ratings. Some set target prices as high as $250, hinting at huge further upside.
We see Nvidia selling over 1 million H20 chips in 2024 and planning massive new orders, especially from China after export rules eased. Nvidia also explores new partnerships, like investing in AI‑infrastructure company Vast Data, which itself is valued up to $30 billion.
Institutional interest is high. ETFs focused on AI and tech keep adding Nvidia. Investors looking for long‑term AI exposure often see Nvidia as a core holding.
Final Words
Citi’s forecast of soaring AI capex especially from sovereign projects puts Nvidia in an attractive spot. As more nations and firms build AI systems, demand for its chips should rise.
We see exciting growth ahead. Nvidia holds a strong lead in both tech and mindshare. Investors who believe in the long horizon of AI might still view it as a top pick. But we also note the risks: capex slowdowns, geopolitics, and competition.
Nvidia looks well positioned. It remains a key part of the AI story With strong fundamentals, powerful products, and global partnerships.
Frequently Asked Questions (FAQs)
Nvidia has not shared an exact capex forecast, but experts expect it to grow as demand for AI chips rises due to more spending by tech companies and governments.
Yes, Citigroup raised Nvidia’s price target to $190. They believe the AI market will grow quickly and Nvidia will benefit from higher chip demand, especially from global governments.
Nvidia stock went up because of strong AI chip demand, new government spending on AI projects, and positive updates from banks like Citi about future growth.
Disclaimer:
This is for information only, not financial advice. Always do your research.