Goldman Sachs Bullish on Nebius Group: AI Infrastructure Provider Poised for Growth

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

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

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.

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.