Nvidia Benefits from Citigroup's $2.8 Trillion AI Spending Projection

In an alert sent to you earlier on Tuesday, we shared that KeyBanc upped its price target for Nvidia (NVDA) shares, and it would seem that one of the reasons behind that can be traced to something Citigroup (C) did. Another is the large win at CoreWeave (CRWV) , a known partner of Nvidia's. Let’s break it down and share the wider implications.

Citigroup Ups AI Spending Forecast

Citigroup raised its forecast for AI-related infrastructure spending to more than $2.8 trillion through 2029 from its prior forecast of $2.3 trillion. The increase reflects aggressive early investments by hyperscalers and growing enterprise appetite. The former speaks to capital spending from the likes of Amazon (AMZN) , Meta (META) , Microsoft (MSFT) and Alphabet (GOOGL) , while the latter points to rising demand for Palantir (PLTR) , ServiceNow (NOW) and others. We’d also lump Eaton (ETN) and Marvell (MRVL) into the beneficiary pile.

Because Citi sees 2026 AI capital spending now near $490 billion next year, up from its $420 billion prior forecast, we expect comments about capital spending from those four Big Tech companies will be of keen interest in the coming weeks. During that soon-to-be-upon September quarter earnings season, we may see those Big Tech companies nudge their 2025 capital spending figures higher yet again, which would support the expected December quarter ramp in Marvell’s custom AI silicon business. It would also be another wave of support for Nvidia, Eaton and others.

The above also reveals why we continue to track AI adoption rates and usage cases in the signals we share. Those rising adoption levels explain why we remain bullish on Marvell’s Enterprise networking and communications infrastructure businesses.

CoreWeave’s Win With Meta: Follow the Money

When CoreWeave reported its June quarter results, it telegraphed that “a significant portion of our full year capex will fall in Q4 due to the timing of go-live dates of our infrastructure.”

But to that comment and other wins, including an expanded contract with OpenAI, we can add Tuesday's announcement with Meta. That announcement was for a new $14.2 billion deal that spans through 2031 for AI computing power that will see CoreWeave give Meta access to its array of Nvidia chips.

This announcement and its timeline are a great example of why we discussed the importance of tracking backlog and remaining performance obligation levels with you a few weeks back. What we are seeing in the CoreWeave-Meta tie-up not only adds a layer of support for Citi’s increased outlook, but it also brings with it an increased visibility for multiple holdings in the Portfolio. It also explains why we will continue to follow the money for AI spending, but for other areas we’re exposed to with the Portfolio’s holdings.

Moving from September to October will soon bring monthly revenue reports from Taiwan Semiconductor (TSM) and Foxconn (FXCOF), and based on those learnings, we’ll revisit several of our price targets, including the one for NVDA shares.

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At the time of publication, TheStreet Pro Portfolio was long NVDA, AMZN, META, MSFT, GOOGL, PLTR, NOW, ETN and MRVL.