Nebius Group Emerges as Key Player in AI Cloud Infrastructure Market

Nebius Gains Ground In AI Cloud, Tightens Nvidia, Microsoft Links - Nebius Group (NASDAQ:NBIS)

Nebius Group NBIS stock surged on Monday after Goldman Sachs analyst Alexander Duval initiated coverage with a Buy rating and announced a price target of $68. Duval noted that Nebius is emerging as a key player in the fast-growing AI Neoclouds space -- a niche segment within the broader GPU-as-a-Service (GPUaaS) market. The analyst pointed out that this market allows AI startups, enterprises and hyperscalers to rent GPU infrastructure remotely via the cloud to run large-scale AI training and inference workloads. Also Read: Goldman Sachs Sees 53% Upside In Nebius Group, Calls AI Infrastructure 'Undervalued' Unlike traditional bare-metal providers or general-purpose cloud platforms, Nebius offers a vertically integrated solution explicitly tailored for AI demands. The company customizes its hardware racks to optimize power efficiency -- up to 20% gains -- while controlling its data center design and operations, Duval said. As per the analyst, this enables better performance, energy usage and customer pricing. Beyond hardware, Nebius' full-stack platform includes orchestration software, elastic server configurations and dedicated AI cloud services like MLOps, database management and scalable storage, he noted. Customers only pay for AI-specific services, which sets Nebius apart from hyperscalers, which offer a wide but generic suite of tools, Duval said. The analyst noted that Nebius positions itself as a neutral and flexible alternative to cloud giants like Alphabet Inc.'s GOOGLGOOG Google Cloud or Amazon.com, Inc.'s AMZN Amazon Web Services. Unlike those hyperscalers, which may develop competing AI models, AI Neoclouds such as Nebius offer shorter contract terms, greater customer data control and zero conflict of interest. This makes Nebius particularly attractive to startups and enterprise clients wary of handing over sensitive models or datasets, as per the analyst. He noted that the company also leverages its roots in Yandex -- where it operated hyper-scale workloads across services like search, ride-hailing, food delivery and music -- to demonstrate technical and operational expertise at scale. Its AI Studio platform also offers Inference-as-a-Service, helping customers deploy and manage LLMs in production without building custom infrastructure. Trending Investment OpportunitiesAdvertisementArrivedBuy shares of homes and vacation rentals for as little as $100. Get StartedWiserAdvisorGet matched with a trusted, local financial advisor for free.Get StartedPoint.comTap into your home's equity to consolidate debt or fund a renovation.Get StartedRobinhoodMove your 401k to Robinhood and get a 3% match on deposits.Get Started Duval noted that Nebius is well-positioned to scale financially. As of first-quarter 2025, it holds $1.4 billion in net cash and has raised an additional $1 billion in convertible debt to fund its global expansion. He said that with major buildouts underway in New Jersey and other international locations, the company's flexible strategy (co-location, build-to-suit and greenfield deployment) enables rapid growth while optimizing capital utilization. Nebius is already serving hyperscale AI labs -- for example, CoreWeave Inc CRWV supports OpenAI and Microsoft Inc MSFT -- and is poised to deepen relationships in this segment, Duval noted. Its ties with NVIDIA Corp NVDA, which faces reduced reliance on in-house chips from hyperscalers such as Google and Amazon, further strengthen its position as a trusted GPU infrastructure partner, per the analyst. Nebius projects a revenue CAGR above 50% from 2025 to 2030, with margins expected to rise as the business scales. AI infrastructure is forecast to drive around 90% of total revenue by 2030, growing to $5.9 billion by then, Duval noted. Inference, which now accounts for about a third of AI server demand, is projected to reach two-thirds by 2027, boosting utilization of depreciated GPUs and improving profitability, as per the analyst. He noted that in addition to scaling inference and training workloads, Nebius sees upside from multimodal AI (e.g., voice, video), sovereign AI projects like Stargate and InvestAI, and broader enterprise adoption. All these trends underscore the demand for flexible, AI-native infrastructure and position Nebius to be a long-term winner in the GPUaaS market, as per the analyst. Duval projected fiscal 2025 sales of $632.3 million and EPS loss of $(3.00). NBIS Price Action: Nebius stock is up 16.37% at $51.55 at publication on Monday. Read Next: Salesforce Underperforms Market As Growth Concerns Plague CRM Giant Photo: Shutterstock NBISNebius Group NV$51.4816.2%Stock Score Locked: Want to See it? Benzinga Rankings give you vital metrics on any stock - anytime. Reveal Full ScoreEdge RankingsMomentumN/AGrowth12.94QualityN/AValue7.86Price TrendShortMediumLongOverviewAMZNAmazon.com Inc$226.070.47%CRWVCoreWeave Inc$134.667.01%GOOGAlphabet Inc$182.870.86%GOOGLAlphabet Inc$181.690.83%MSFTMicrosoft Corp$502.85-0.09%NVDANVIDIA Corp$165.250.20% This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors. Market News and Data brought to you by Benzinga APIs

Goldman Sachs Sees 53% Upside In Nebius Group, Calls AI Infrastructure 'Undervalued' - Nebius Group (NASDAQ:NBIS), Goldman Sachs Group (NYSE:GS)

Goldman Sachs GS has initiated coverage on Nebius Group NBIS with a Buy rating and a price target of $68. This suggests a potential upside of about 53.49% from the stock's closing price on Friday. What Happened: Goldman Sachs identified Nebius as a major player in the AI Neocloud market, offering AI GPU infrastructure rental services that support the fast-growing Generative AI sector, reported Investing.com. The investment bank emphasized Nebius's key strengths, including its comprehensive software suite, cost efficiency, and proven ability to operate at scale -- advantages that set it apart from other GPU rental providers. While the stock has seen recent gains, Goldman Sachs believes Nebius's AI infrastructure business is still undervalued relative to its industry peers. See Also: FAA, Boeing Say Fuel Switch Locks On 787 Dreamliner Are Safe Amid Air India Crash Probe Goldman Sachs anticipates a "supportive catalyst path" over the next 12 months, which it believes will drive further stock outperformance and reinforce the firm's positive risk-reward outlook. Why It Matters: Nebius Group has been making significant strides in the AI industry. The company's stock has seen a staggering 385% year-over-year revenue growth in its latest quarter. In the first quarter of 2025, the company posted revenues of $55.3 million, marking a 385% increase compared to the same period last year. Nebius Group is among the earliest adopters of Nvidia Corp.'s NVDA full-stack approach to AI infrastructure and is a Reference Platform NVIDIA Cloud Partner. Read Next: Jeffrey Epstein in Tapes Released by Michael Wolff: 'I Was Donald's Closest Friend' Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors. Photo: Shutterstock GSThe Goldman Sachs Group Inc$704.95-%Stock Score Locked: Edge Members Only Benzinga Rankings give you vital metrics on any stock - anytime. Unlock RankingsEdge RankingsMomentum87.29Growth71.25Quality39.24ValueN/APrice TrendShortMediumLongOverviewNBISNebius Group NV$46.925.91%NVDANVIDIA Corp$165.130.13%Market News and Data brought to you by Benzinga APIs

Why Shares of Nebius Group Are Rocketing Higher Today | The Motley Fool

Shares have soared in 2025 -- and one analyst thinks they're not done rising yet Initiating coverage on artificial intelligence (AI) stock Nebius, Alexander Duval, an analyst at Goldman Sachs, assigned a buy rating and a $68 price target, which implies upside of 53.5% based on Friday's closing price. Through the first half of 2025, shares of Nebius had already risen nearly 100%. Recognizing Nebius as a leader in the neocloud market, Duval based his favorable perspective on the company's full stack software offering and cost advantages, according to The Fly. Providing high-performance infrastructure specifically designed for graphics processing units (GPUs), neoclouds are a niche of cloud computing uniquely suited for AI, machine learning, and other applications that require substantial computing power. Analysts often have short investing horizons, so take Duval's price target with a grain of salt. But investing in Nebius looks like a good way to gain AI exposure. The company's merits and its ample growth prospects justify clicking the buy button.

Nvidia Backs It. Goldman Sachs Loves It. Should You Invest in Nebius Stock? | The Motley Fool

Nebius Group (NBIS -0.47%) has been one of the hottest stocks on the market in 2025, rising a whopping 92% as of July 16. It looks like the cloud computing company's red-hot rally is here to stay, thanks to a huge addressable market and positive Wall Street sentiment. The Dutch company is in the business of providing artificial intelligence (AI) cloud infrastructure to customers. Its full-stack AI infrastructure allows developers and customers to rent powerful graphics processing units (GPUs) from the likes of Nvidia (NVDA 0.37%) on an hourly basis so that they can train and fine-tune models, run inference tasks, and create custom AI solutions with the help of third-party tools. Let's take a closer look at what Nebius does, and check why this AI stock is expected to soar higher even after clocking phenomenal gains so far in 2025. Nebius customers can scale from a single GPU to large clusters based on their requirements, and they can use popular large language models (LLMs) from DeepSeek, Microsoft, Meta Platforms, Stability AI, and others to build apps. The company has made its name by offering top Nvidia GPUs such as the H100 and the H200, and claims that its customers "will be among the first to gain access to NVIDIA's next-generation Blackwell platform." It's worth noting that Nvidia is an investor in Nebius. The AI cloud infrastructure provider announced a private placement financing worth $700 million in December last year. Nvidia was one of the companies that took part in this strategic financing that Nebius says was for accelerating the rollout of its full-stack infrastructure. So, Nvidia and Nebius enjoy a close partnership. That's expected to be beneficial for the latter, since the AI chip giant is busy rolling out AI infrastructure around the globe. Importantly, Nebius' results make it clear that it is quickly making its presence felt in the fast-growing cloud AI infrastructure-as-a-service market. The company's revenue in the first quarter of 2025 shot up by almost 5x year over year to $55.3 million. Nebius is just getting started right now, but the important thing to note here is that it's quickly building a solid revenue pipeline. The company says that its annualized run-rate revenue (ARR) increased by 684% in Q1 to $249 million, easily outpacing the growth in its top line. Looking ahead, Nebius management is confident of achieving an ARR of $750 million to $1 billion by the end of 2025 as it rolls out more cloud capacity. The company has gone from just one location to five data center locations in the space of just three quarters, and says it is "actively exploring new sites in the U.S. and around the world." Nebius points out that its robust balance sheet, which has over $1.4 billion in cash and only $187 million in debt, will allow it to increase its data center capacity to 100 megawatts (MW) by the end of 2025, followed by a significant increase in 2026. All this explains why the company is forecasting revenue of $500 million to $700 million in 2025, which would be a massive increase over last year's top line of $117 million, even at the lower end of the estimate. Consensus estimates are expecting Nebius' outstanding growth to continue over the next couple of years as well. That's not surprising, considering the $400 billion opportunity in the cloud AI infrastructure market. So, it's easy to see why Goldman Sachs expects this AI stock to fly higher, despite its impressive rally in recent months. The investment bank believes that Nebius remains undervalued on account of the remarkable growth that it is delivering. Goldman rates Nebius as a buy and has a 12-month price target of $68 on the stock. That points toward roughly 30% gains from current levels, though it's worth noting that Nebius stock popped 17% in a single session following Goldman's coverage. Investors, however, may be wondering if it is worth buying Nebius following its recent gains. Nebius stock is trading at a rich 68 times sales right now following its phenomenal jump in 2025. But at the same time, investors should note that its stunning pace of growth justifies its expensive valuation. We have already seen that Goldman Sachs believes Nebius to be undervalued after taking its growth potential into account. In fact, the stock's forward sales multiple is way lower than the trailing one. Nebius, therefore, looks like an ideal pick for growth-oriented investors right now. Its outstanding growth is likely to result in more stock market upside, just like Goldman predicts.

Why Shares of Nebius Group Are Soaring Higher This Week | The Motley Fool

Sometimes it just takes one bit of bullish news to buoy a stock for the next few days. That's exactly what investors in Nebius Group (NBIS -2.77%) are finding this week. While an analyst's optimistic outlook on the stock that came out last week helped to drive the stock higher on Monday, the market's enthusiasm for the cloud platform provider that specializes in artificial intelligence (AI) infrastructure has carried the stock higher consistently through the week. According to data provided by S&P Global Market Intelligence, shares of Nebius are up 21.2% from the market's close last Friday through the end of trading on Thursday. Last weekend, Alexander Duval, an analyst at Goldman Sachs, initiated coverage on Nebius. In addition to assigning a buy rating, Duval assigned a $68 price target. For investors, Duval's the price target is particularly encouraging because it's consistent with a separate analyst's bullish opinion -- which included a buy rating and $84 price target -- on the stock that was shared in June. Instead of developing data centers for a variety of computing needs, Nebius specializes in neoclouds -- a specific sort of cloud computing that's developed specifically for artificial intelligence (AI), machine learning, and other select applications that demand massive computing power. Besides CoreWeave, Nebius is the only public company that operates as a neocloud provider. Nebius stock has been on an absolute tear so far in 2025, but it's important for investors to think twice before deciding that the stock is right for them. While there are valid arguments to support that Nebius has a bright future, the company is still unprofitable, and, as such, is an investment with a higher degree of risk.

Nebius: The Hidden AI Infrastructure Gem Trading at a 50% Discount | The Motley Fool

Investors shouldn't sleep on one of the leading neocloud operators. It's no secret that artificial intelligence (AI) has come into its own over the past few years, and some of the biggest names in technology have benefited greatly from advances in generative AI. Palantir and Nvidia are among the biggest winners, soaring 2,180% and 1,030%, respectively, since early 2023. With gains of that magnitude, it isn't surprising that investors are turning over every stone looking for the next big AI winner. One area that's been attracting a lot of attention is that of neoclouds, which provide on cloud-based AI processing resources for companies. For example, since CoreWeave went public in late March, the stock has gained an impressive 215% (as of market close on Friday). Another example is rival neocloud provider Nebius Group (NBIS 17.31%). Since it resumed public trading in mid-October, the stock is up 122% and shows no signs of slowing. The prevailing secular tailwinds and bullish sentiment among investors have helped fuel Nebius' rise, and one Wall Street analyst believes Nebius is an unsung hero in the space. Let's dig further into the concept of neoclouds and why Nebius could be a big winner in the AI revolution. Most investors are familiar with the concept of cloud computing, which provides users online access to applications, data processing, and data storage. The flexibility, improved security, and ability to scale offered by the cloud make it an attractive choice for many businesses. Furthermore, most AI processing takes place in the cloud, which has spurred even greater adoption. Neoclouds have emerged to fill a vital need in the AI revolution. In simplest terms, a neocloud is a special category of cloud provider that has stockpiled the graphics processing units (GPUs) and other infrastructure necessary for AI processing and high-performance computing. Some refer to these offerings a GPU-as-a-service (GPUaaS). That's where Nebius comes in. The company offers an "AI-centric cloud platform building large, cost-efficient GPU clusters to service the explosive growth of the global AI industry," according to its website. The results tell an intriguing tale. In the first quarter, revenue of $55.3 million soared 385% year over year, albeit from a small base. Perhaps even more impressive is the annualized run rate from its core AI services of $249 million, an increase of 684%. Nebius isn't yet profitable, as it scrambles to expand its data center network to meet the blistering demand of AI. The company is bringing three new locations online in 2025 and expects to have 100 megawatts (MW) of contracted capacity by the end of the year. In its Q1 shareholder letter, Nebius notes that the majority of its AI processing capacity is from Nvidia H200 AI chips and it will begin to roll out Nvidia Blackwell, Grace Blackwell, and Blackwell Ultra chips in the second half of 2025. The combination of its expanding data center network and increasing AI processing power will help take Nebius' growth to the next level. Wall Street is incredibly bullish on Nebius. Of the four analysts who offered an opinion in July, all four rate the stock a buy or strong buy. Furthermore, analysts' consensus estimates of $66.50 represents potential gains for investors of 50% compared to the stock's closing price on Friday. Goldman Sachs analyst Alexander Duval called Nebius a "top pick" on Sunday, initiating coverage with a buy rating and a price target of $68, or potential upside of 53% (again, compared to Friday's closing price). Duval cites Nebius' full-stack software, cost efficiencies, and the ability to operate at scale as key advantages. He also believes the rising adoption of generative AI will continue to drive demand for the foreseeable future. Additionally, the analyst notes that Nebius trades at an enterprise-value-to-sales ratio of 3, which is significantly less expensive than rival CoreWeave, which commands a multiple of 5. This suggests investors may well be underestimating Nebius' potential. On a related note, Nvidia owns a stake in Nebius, with nearly 1.2 million shares valued at roughly $25 million. This suggests a deepening relationship between the companies. This illustrates why Nebius is a hidden gem in the AI neocloud space and might be worth a look.

Could This Monster Nvidia-Backed Artificial Intelligence (AI) Data Center Stock Be the Best Bargain in the Market Right Now? | The Motley Fool

When it comes to Nvidia-backed data center stocks, investors can't get enough of CoreWeave. Another competing force is emerging in the background, though. Since OpenAI commercially launched ChatGPT on Nov. 30, 2022, shares of semiconductor company Nvidia have soared by more than 900%. As of closing bell on July 16, Nvidia boasted a market capitalization of $4.2 trillion -- making it the most valuable company in the world. While these trends suggest Nvidia is perhaps the most dominant force in the artificial intelligence (AI) landscape, the company has a number of strategic relationships that have helped contribute to its growth. Let's explore some of the companies Nvidia has partnered with and analyze why these relationships are important. From there, I'll detail one particular Nvidia-backed data center stock that I think growth investors should keep an eye on right now. According to Nvidia's latest 13F filing, the company has investments in the following businesses: Both CoreWeave and Nebius are major players in the data center infrastructure market. While I think each of these stocks are deserving of attention, I see Nebius as an under-the-radar bargain right now. Nebius had an interesting path to relevancy in the AI realm. The company listed on the Nasdaq Stock Market in late 2024 following a spin-off from Russian internet conglomerate Yandex. Subsequently, Nebius raised $700 million through a private placement with Nvidia being one of the participants. Similar to CoreWeave, Nebius can be thought of as a neocloud. Through various data centers located across Europe and the U.S., companies have the ability to access Nvidia's GPUs through a cloud-based infrastructure services platform. While the company's infrastructure-as-a-service competes with CoreWeave and Oracle, I see plenty of room for multiple winners. Just this year alone, cloud hyperscalers Microsoft, Alphabet, and Amazon are expected to spend roughly $260 billion on capital expenditures (capex) -- much of which will be allocated toward AI data centers and additional chip access. Moreover, Meta Platforms recently invested $14.3 billion into data labeling start-up Scale AI. In addition, the social media and metaverse behemoth has been on a hiring blitz -- poaching top researchers from OpenAI and other competing platforms to help create the Meta Superintelligence Labs (MSL) operation. These investments underscore the idea that AI's largest developers are building sophisticated ecosystems in need of high-performance compute power and tightly integrated infrastructure services. I see the tidal wave of capex investment from hyperscalers as a bullish secular tailwind for Nebius and the neocloud environment. As of the end of the first quarter, Nebius' AI infrastructure business was operating at an annual recurring revenue (ARR) run rate of $249 million. While this was good for 684% growth year over year, management is guiding for an ARR run rate between $750 million and $1 billion by the end of the year. To me, this forecast suggests that Nebius is well positioned to take advantage of rising infrastructure spend throughout the second half of the year as Nvidia continues rolling out its Blackwell architecture. Just recently, equity research analyst Alexander Duval of Goldman Sachs placed a price target of $68 on Nebius -- implying 28% upside from prices as of closing bell on July 16. Andrew Beale of Arete Research is even more bullish, as his $84 price forecast implies that Nebius is trading for nearly a 60% discount. While Nebius stock's 139% share price appreciation might suggest the stock is overbought, I wouldn't turn my back on the company just yet. CoreWeave went public earlier this year and has been one of the AI infrastructure market's biggest storylines ever since. Moreover, Oracle's success in infrastructure services also adds a layer of credibility to the broader neocloud opportunity and helps underscore the need for these businesses as demand for chip access continues to surge. In my eyes, Nebius -- which is far smaller than CoreWeave and Oracle -- has mostly gotten caught up in macro-driven momentum. With that said, considering the company's financial growth explored above, I'd make the case that its current valuation is less rooted in speculation and finally experiencing a long-overdue correction. I see Nebius as a bargain right now compared to its peers and think the stock could carry significant upside, as the analysts on Wall Street suggest. To me, Nebius is a no-brainer opportunity and could swiftly emerge as a disruptive force across the cloud infrastructure and AI data center markets.