TLDR
- Citi analyst slashed Nvidia price target to $200 from $210 citing Broadcom competition
- Broadcom’s $10 billion custom chip order threatens Nvidia’s AI market dominance
- NVDA stock rose 0.8% premarket despite falling 8% over past month
- KeyBanc maintains $230 target, highlighting CUDA software advantages
- Nvidia invested in €1.7 billion Mistral AI funding round
Nvidia stock gained 0.8% in premarket trading Tuesday, recovering from recent losses as investors weighed mixed analyst opinions on the AI chip leader.
Shares climbed to $169.65 despite mounting competition concerns that have pressured the stock. NVDA has dropped 8% over the past month but remains up 25% year-to-date.
The premarket gain came after Citi analyst Atif Malik trimmed his price target to $200 from $210. He maintained a buy rating while warning about growing competitive threats from Broadcom.
Malik’s concerns center on Broadcom’s recent disclosure of a $10 billion order for custom AI accelerators. These XPU chips could reduce demand for Nvidia’s graphics processing units as tech giants develop their own hardware.
Custom Chip Market Accelerating
The custom processor market poses the biggest near-term risk to Nvidia’s dominance. Citi projects XPU sales will grow 53% in 2026, outpacing the 34% growth expected for AI GPUs.
Google, Meta, and Amazon are driving this shift as they ramp up custom chip development. The move threatens Nvidia’s roughly 90% market share in AI processors.
Malik estimates the competition could reduce Nvidia’s 2026 GPU sales by $12 billion. This includes a $2 billion cut from Meta alone as the social media giant develops its own chips.
The revised forecast implies a 5% hit to Citi’s prior $232 billion prediction for 2026 merchant GPU sales. However, the analyst noted his estimates exclude potential China sales, which could provide upside.
CUDA Software Provides Defense
Not all analysts share Citi’s bearish view on competition. KeyBanc’s John Vinh maintained an overweight rating and $230 price target on Monday.
Vinh highlighted Nvidia’s CUDA software platform as a key competitive advantage. Developers’ familiarity with this ecosystem creates switching costs that could limit customer defection to rivals like Google’s Tensor Processing Units.
“We see limited competitive risks and expect Nvidia to continue dominating one of the fastest-growing workloads in cloud and enterprise,” Vinh wrote in his research note.
Both Nvidia and Broadcom rank among his top semiconductor picks. Vinh believes the market can support multiple winners in the expanding AI chip space.
Nvidia also made strategic moves Tuesday, participating in Mistral AI’s €1.7 billion funding round. The French AI startup is now valued at $13.8 billion following the investment led by ASML Holding.
CEO Jensen Huang’s October 28 GTC keynote could serve as the next major catalyst for NVDA stock. Analysts expect updates on Blackwell chip production and new AI partnerships at the event.
