Citi expects Nvidia stock to trade higher post earnings

Citi anticipates Nvidia's stock price will rise after the company reports its latest earnings. The financial institution has raised its revenue projections due to Nvidia's strong sales of AI networking components and its expanding line of Blackwell chips. According to Citi, Nvidia is expected to generate $93 billion in revenue for the July quarter, which is $1 billion higher than the average Wall Street prediction.

The company's October quarter revenue is forecasted to be $105 billion, about $1.5 billion more than the consensus estimate and a 13% increase from the previous quarter.

Citi has maintained its 'Buy' rating for Nvidia and set a price target of $300 per share. However, the brokerage has reduced its valuation multiple assumption to 24 times projected earnings for 2027, down from the previous 28 times. This adjustment reflects lower market multiples across the board.

Nvidia's data-center revenue is expected to grow 15% sequentially in the July quarter and 14% in the October quarter, unlike the Street's estimate of 13% growth in both periods. The brokerage attributes this growth to faster-than-expected shipments of 1.6-terabit transceivers and the initial ramp-up of Nvidia's next-generation Vera Rubin platform.

Citi is confident that Nvidia has secured enough high-bandwidth memory supplies for 2026 and 2027, potentially enabling analysts to increase their estimates. The brokerage has also raised its fiscal year 2027, 2028, and 2029 adjusted earnings-per-share estimates by 1%, 2%, and 2%, respectively.

In addition to its strong performance in the AI infrastructure market, Citi highlights Nvidia's growing role in financing AI infrastructure projects. The brokerage points to Nvidia's support for the Ohio PORTS-Pike campus, a $4.25 billion project involving land, power, and shell construction for an initial 4.25 gigawatts of IT capacity. This arrangement could help AI labs and cloud providers address near- to medium-term financing constraints as they expand their computing capabilities.

Citi projects Nvidia to sell 7.7 million Blackwell GPUs in fiscal year 2027, driven primarily by the B300 ramp-up. The firm lowers its Vera Rubin estimate to 2 million units from 2.2 million due to tighter memory availability. The company has increased its fiscal year 2028 total GPU unit estimate by 7%, reflecting a shift toward more servers with lower memory per chip.