Citi analyst expects Nvidia stock to rise another 20%. What risk is he warning about?

A Citi analyst raised his target price on shares of chip maker Nvidia and now expects their value to increase by another 20%. According to him, the key driver of Nvidia's growth will be the rapid development of government initiatives to create infrastructure for artificial intelligence. However, he also warned of new risks associated with the White House's restrictions on exports of the company's chips.

Citi analyst Atif Malik raised his target price on Nvidia shares from $180 to $190 and reiterated a Buy advice, MarketWatch reports. The analyst's new target implies the company's market value will rise another 20% from its July 7 closing price. Malik noted that the AI market continues to expand aggressively and Nvidia will continue to capitalize on that. The analyst raised his forecast for the addressable market (TAM) for AI chips in data centers: he now expects this market to grow to $563 billion by 2028 instead of the previously projected $500 billion.

According to Malik, Nvidia's main growth driver will be the rapid development of "sovereign AI" - Nvidia's main growth driver will be the rapid development of "sovereign AI," a large-scale government initiative to build its own infrastructure for artificial intelligence. As early as 2025, this area could bring the company "billions of dollars" in revenue, and next year, Malik believes, its share of Nvidia's business will only grow.

"Nvidia has direct access to [tens of gigawatts of computing power] over the next few years to build enterprise and government AI factories and is already involved in virtually all government [AI infrastructure] deals," the analyst said. This makes Nvidia a key player in the global race to build a national AI infrastructure, he said.

Malik also expects Nvidia to restore adjusted gross margin to around 75% by the end of the current fiscal year. According to him, the company has already overcome the major challenges faced in transitioning to the next-generation Blackwell architecture. The confidence is bolstered by the successful deployment of the GB200 Blackwell chips and high expectations for the new Blackwell chip - GB300.

An analyst has warned of one new risk: possible export restrictions by the Donald Trump administration on shipments of AI chips to Southeast Asia. Bloombergreported last week that Trump is considering a ban on exporting advanced chips to Malaysia and Thailand to prevent them from being resold to China, where shipments of such chips from the U.S. are already banned. So far, this is only a discussion and there is no final decision. Malik believes such a move could pose moderate risks for Nvidia, although Citi estimates that the company has robust tools to track its GPUs.

In trading on July 8, Nvidia rose by 1% to $159.7 per unit. The company's shares are trading at historic highs, and its market capitalization is close to being the first in history to cross the $4 trillion mark. To do this, Nvidia's securities must rise another 1.4% from the close of July 7 and end trading at a level of at least $160.46 per unit, MarketWatch notes. At the close of trading on July 7, Nvidia's market capitalization was $3.85 trillion (or $158.24 per share), making it the most expensive public company in the world.

Since the start of 2025, Nvidia's market value has risen 18%, while the main US stock index, the S&P 500, has only risen 6% over the same period.

On Tuesday, Bernstein analysts also reiterated their recommendation to buy Nvidia shares with a $185target price. The investment bank alsobelieves that Nvidia remains exceptionally well-positioned amid the AI boom and the construction of numerous data centers. "The data center market is a huge opportunity and is still in the early stages of development, so there remains significant upside potential [in this segment]," the analyst said in a note cited by CNBC.

90% of analysts who recommended Nvidia's ratings advise buying the company's securities, and their consensus target price of $174 suggests the chipmaker's market value is up another 10% from its last closing price on July 7.

This article was AI-translated and verified by a human editor