Nvidia (NASDAQ:NVDA) experienced a 0.5% increase in pre-market trading on Monday following an endorsement from investment firm Citi, which reaffirmed its buy rating and adjusted its earnings projections for the semiconductor powerhouse due to the surging demand for graphics processing units (GPUs).
Citi analyst Atif Malik, who also revised the per-share price target from $520 to $600, highlighted the presence of “multiple” new data center orders worth $2 billion or more. Furthermore, Malik expressed a deeper understanding of the competition posed by custom application-specific integrated circuits (ASICs) and AMD (NASDAQ:AMD) chips in the data center sector, as well as the growing influence of generative artificial intelligence (AI) and its effects.
Consequently, Malik raised the earnings per share estimates for fiscal years 2024, 2025, and 2026 by 6%, 38%, and 30% respectively.
In our analysis, we continue to identify a favorable risk-reward profile, driven by accelerating year-over-year data center sales throughout the year, despite potential downsides such as the China ban, a slowdown in macroeconomic factors affecting gaming demand, and competition, Malik wrote in an investor note.
According to a consensus of analysts, Nvidia (NASDAQ:NVDA) is expected to report quarterly earnings of $2.06 per share on revenue of $11.04 billion.
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Author Faith Yakubu 
