Citi: Reiterates "buy" rating on NVIDIA, multiple incremental revenue sources provide substantial upside potential for market expectations.

JPMorgan Chase released a research report indicating that Nvidia revealed at an analyst conference that as of 2027, the purchase orders and demand for Blackwell and Vera Rubin exceed $1 trillion, but these numbers are only the lower limit as they do not include Groq LPU racks, independent Vera CPUs, storage systems, and Rubin Ultra, all of which represent different levels of incremental revenue sources. Nvidia aims to use about 50% of its free cash flow for capital return through share buybacks and dividends, compared to the level of about 42% in the 2026 fiscal year, meaning a total of over $200 billion in 2026 and 2027. Additionally, the bank mentioned that Nvidia's management strongly defends the sustainability of its gross profit margin, redefining competitive advantage around factory-level token economics rather than chip-level pricing, and dismissing the argument that cheaper chips are a fundamental misunderstanding of its business. The management pointed out that about half of the data center revenue is being driven by a structural shift from CPU workloads to accelerated computing, which is a structural demand-driving factor independent of AI training and inference cycles, and still has significant growth potential. The bank believes that multiple incremental revenue sources for Nvidia, not considered a year ago, provide substantial upside to current market expectations, and the company's competitiveness is expanding. The bank reiterated its "buy" rating on Nvidia with a target price of $265.