has already ridden the AI wave to become the world’s most valuable company, but the opportunity has in no way been exhausted, as demand for its chips continues to accelerate and new use cases for AI are just beginning to emerge.

Underscoring just how much room there still is for growth, Citigroup’s Atif Malik, an analyst ranked in the 13th spot amongst the thousands of Wall Street stock experts, recently revised his outlook upward for the entire data center semis AI TAM. Malik now projects that the total addressable market for data center AI chips will reach $563 billion by 2028, marking a 13% increase from his prior $500 billion estimate. Much of this boost stems from stronger-than-expected demand from sovereign AI initiatives, which are already contributing billions in 2025 and are poised to drive even more sales for Nvidia as new sovereign AI factory buildouts ramp up.

“We believe sovereign demand is already contributing up to billions of dollars in 2025 and expect the mix of sovereign AI sales to step up in 2026,” the 5-star analyst went on to say. “Nvidia has line of sight to 10s of GW over the next couple of years for enterprise and sovereign AI factory buildouts and the company is involved in essentially every sovereign deal (1GW ~ $50B of Nvidia sales).”

However, it’s not just compute driving the TAM higher. Malik emphasizes that the most notable upward revision comes from networking, with the segment’s TAM now expected to hit $119 billion, a 32% jump from his previous $90 billion forecast. This increase is driven by several converging trends: growing demand for larger AI training clusters, the intensifying compute needs of inference workloads, and a major new scale-up opportunity in intra-networking. Reflecting recent commentary from Broadcom, Malik now assumes a networking-to-compute dollar content attach rate of roughly 30% (up from 24%), meaning networking is set to account for 21% of the overall data center semis TAM, compared to the earlier estimate of 18%.

In tandem with these TAM revisions, Malik has also raised his Nvidia data center sales forecasts for FY2027 and FY2028 by 5% and 11%, respectively. Compute sales are now expected to grow 4% and 8% above previous estimates, thanks primarily to strong sovereign AI demand. Across the FY2027–FY2028 period, Malik projects that compute will make up about 93% of total AI merchant sales and around 80% of total AI accelerator sales, while networking will represent a high-teens to 20% share of Nvidia’s data center revenue. The analyst anticipates networking revenue to grow 112% in FY2027, reflecting continued momentum in AI switching and benefits from the emerging scale-up opportunity enabled by Nvidia’s now more open NVLink solution.

With all of that about to take place, Malik believes a higher price target is warranted. The analyst lifts his target from $180 to $190, implying a further 20% upside for Nvidia shares over the coming year, and reiterates his Buy rating. (To watch Malik’s track record, click here)

Malik is far from alone in his bullish stance: 34 other analysts join him in recommending Nvidia, while just 4 analysts rate it a Hold and only 1 remains bearish. The consensus remains a resounding Strong Buy, with the average price target price at $175.97, suggesting shares could climb another 10% in the months ahead. (See Nvidia stock forecast)

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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.

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