$NVIDIA (NVDA.US)$ On Monday, Citi reaffirmed its confidence...

$NVIDIA (NVDA.US)$ On Monday, Citi reaffirmed its confidence in NVIDIA (NASDAQ:NVDA), maintaining a Buy rating and a $150.00 price target for the stock.

The firm's analysis suggests a bright future for NVIDIA's GPU sales, anticipating significant year-over-year growth in both 2024 and 2025. NVIDIA's GPUs are expected to play a critical role in the development of artificial intelligence (AI) and machine learning (ML) infrastructure, complementing the use of custom Application-Specific Integrated Circuits (ASICs).

According to Citi's projections, NVIDIA's GPU compute sales could surge by 118% in 2024 and 84% in 2025. Sales to hyperscalers are also forecasted to increase by 100% in 2024 and 67% in 2025. This growth is expected to account for 31% of U.S. cloud provider capital expenditures in 2024, marking a 9% increase over 2023, and is anticipated to rise to 35% by 2025. On the other hand, custom ASICs are also predicted to grow, representing 8% of U.S. cloud provider capex in 2024, with sales ramping up by more than 200% before stabilizing to a 16% year-over-year growth in 2025.

The demand for NVIDIA's products remains robust, as evidenced by various AI accelerator projects and AMD (NASDAQ:AMD)'s revised AI Total Addressable Market (TAM) estimate, which increased from $400 billion to $500 billion by 2028. Citi now expects the AI accelerator TAM to reach $380 billion by 2028, with AI GPUs comprising approximately 75% of this market.