Nvidia Remains Top Pick as Data Center Capex to Rise 69% in 2026
Citi maintained Nvidia as a top semiconductor pick heading into Q1 earnings, highlighting data center AI infrastructure spending with cloud provider capex set to rise 69% in 2026. Analysts also warn potential memory supply bottlenecks could hamper Nvidia’s next-generation AI chip production.
1. Citi Maintains Nvidia as Top Semiconductor Pick
Citi analysts kept Nvidia among their overall top picks entering the first-quarter earnings season, citing strong AI and general-purpose server demand driving data center chip consumption.
2. Data Center Capex Surge Fuels AI Infrastructure
Forecasts show the five largest U.S. cloud providers will boost capital expenditures by 69% in 2026 following a 79% jump in 2025, supporting a projected $731 billion data center semiconductor market by 2028.
3. Memory Bottlenecks Pose Production Risk
Analysts have flagged potential memory supply constraints that could slow production of Nvidia’s next-generation AI accelerators, raising concerns over pricing and output timelines.