In "The Big Bank," Citigroup: The AI industry is developing in the right direction, recommends buying NVIDIA with a target price of $270

AASTOCKS
2025.10.27 02:36

Citi conducted a survey of 302 AI startups, among which 192 have publicly available data, with a total annual recurring revenue of $55 billion. In addition, data released by enterprise IT service providers indicates that AI-related service revenue is approximately $6 billion per year, and the actual figures could be higher as many companies have not disclosed their data.

The bank pointed out that AI companies currently pay $106 billion annually to cloud service providers for GPU leasing, while cloud service providers have cumulatively invested $304 billion in capital expenditures to build AI computing power, estimating that the suppliers' gross margin should reach 40%.

The bank stated that although the current revenue in the AI industry is not yet sufficient to cover the substantial investments, it is expected that by 2026, the AI industry revenue will grow by 160% year-on-year, reflecting that the industry is moving in the right direction. The bank holds a positive outlook on the industry, recommending Taiwan Semiconductor and NVIDIA (NVDA.US), both rated "Highly Confident to Outperform the Market," with target prices of NT$2,000 and $270, respectively

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