Citigroup has cut its price target on semiconductor giant Nvidia for the second time in 2025 after observing weeks of weakening demand for artificial intelligence (AI) chips and cloud infrastructure investment.
According to a Friday CNBC exclusive, the American bank reduced its target from $163 to $150 per share, further down from its $175 forecast in January. The figure is still 39% more than current levels, but the financial institutions believe growing headwinds will ground the high-flying stock.
Nvidia Corporation closed at $107.61 on Thursday, April 10, marking a decline of $6.35 or 5.57% from the previous trading session. Over the past four weeks, the stock has slipped by 1.34%, though it remains up 18.76% over the last 12 months.
Citi analysts said macroeconomic uncertainty and weak capital expenditures by hyperscalers like Microsoft could drag Nvidia’s future earnings further.
Citi lowers GPU sales outlook through 2026
Citi analyst Atif Malik noted that Nvidia’s earnings and sales outlook had dimmed due to reduced cloud spending and ongoing global trade friction.
“Our revised outlook is based on our expectations that MSFT’s FY26 capex will likely contract instead of grow,” Malik stated. He mentioned multiple reports showed Microsoft has begun pulling back on data center projects, which he believes translates to decreasing GPU demand.
As a result, Citi trimmed its GPU sales estimates for 2025 and 2026 by 3% and 5%, respectively, flagging a potential deceleration in AI-related investments by cloud giants.
Beyond reduced capital expenditure, the bank listed trade tensions as another risk. Malik warned that rising tariffs could impact Nvidia’s profit margins.
“We expect Nvidia margins to be moderately impacted by tariffs,” he propounded, adding that a global economic slowdown triggered by trade hostilities could dampen enterprise investments.
Still, Malik noted that Nvidia may still benefit from exemptions under the United States-Mexico-Canada Agreement (USMCA), which could help offset some tariff-related damage.
Marvell Technology was another casualty of Citi’s revised outlook, which reduced its fiscal year 2027 revenue and earnings-per-share forecasts by 5% and 8%, respectively. Citi slashed Marvell’s price target to $96, down from $122.
White House reverses Nvidia GPU export ban after $1M dinner
In other related stories, the US government has backed away from a plan to block Nvidia’s H20 HGX GPU exports to China following a dinner between President Donald Trump and Nvidia CEO Jensen Huang earlier this week.
According to NPR, the meeting occurred at Trump’s Mar-a-Lago resort, with an entry fee reportedly set at $1 million per guest.
Sources say that the Trump administration had been preparing to halt shipments of H20 HGX GPUs, Nvidia’s top-performing AI chips still legally sold to China. Yet, the plan was shelved following Huang’s pledge to invest more heavily in US-based AI infrastructure, which supposedly satisfies some of the administration’s concerns.
The Biden-era AI Diffusion Rule is still scheduled to take effect on May 15 and is expected to tighten export restrictions on American-made AI chips to Chinese entities.
Under the rule, countries like China are excluded from special license exemptions, effectively prohibiting the shipment of advanced processors, even in small quantities.
The H20 HGX was specifically designed to fit within the rule’s Total Processing Performance (TPP) threshold, allowing Nvidia to sell it legally under current guidelines. But with the Diffusion Rule’s full implementation pending, China will soon be barred from receiving even minimal shipments, unless specific licenses are granted.
Nvidia sold $16 billion worth of H20 chips to Chinese customers in the first quarter of 2025 alone. It is unclear if Nvidia will be permitted to continue exporting H20 GPUs to China after the May 15 deadline.
Observers are watching closely to see whether the Trump administration will alter or override the AI Diffusion Rule to preserve sales or issue Nvidia licenses for select customers.
Chinese chip manufacturers not worried about tariffs
Meanwhile, according to the South China Morning Post, several publicly listed Chinese semiconductor companies say China’s 125% tax on American imports will not affect business.
Dozens of Chinese chipmakers issued statements on Thursday to tell investors and consumers that there was minimal disruption to their business operations.
Cambricon Technologies, a Shanghai-listed AI processor manufacturer, mentioned that overseas revenue made up less than 1% of its total sales in both 2023 and 2024. The firm claimed it had dealt with strict limitations since being added to the US Entity List in 2022.
“The latest tariff increases will not substantially impact our operations,” the company stated.
Loongson Technology, a Chinese chip designer, also told SCMP the new tariffs pose “no negative impact on the company,” and confirmed that none of its revenue is derived from the American market.
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This articles is written by : Nermeen Nabil Khear Abdelmalak
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