Nebius Group Emerges as Potential AI Powerhouse Following Nvidia Investment and Citron Research Endorsement

Meet the Next AI Darling That Citron Research's Andrew Left Says Can Double. Nvidia Is an Investor and Not a Single Wall Street Analyst Covers the Stock. | The Motley Fool

Citron Research's Andrew Left made some big calls as of late. Recently, Left went short on Michael Saylor's company, MicroStrategy, suggesting that the data company and large buyer of Bitcoin is now trading detached from Bitcoin fundamentals. The call is interesting because Citron and Left four years ago said MicroStrategy was the best way to gain exposure to Bitcoin, although part of the short thesis is due to expanding access to Bitcoin. Left is now making another bold call, claiming he's found Wall Street's next artificial intelligence (AI) darling. The call conveniently occurred on the same day that AI chip king Nvidia participated in a $700 million private placement for the company that also included the venture capital giant Accel and global investment firm Orbis Investments. Let's meet this new potential AI darling and see if it is as promising as Left says. Citron's shoutout and Nvidia's investment may have been the first time you heard of the AI infrastructure company Nebius Group (NBIS 3.34%). How is that possible? Well, Nebius has been on an interesting journey. Until October, the stock hadn't traded on the public markets for three years. That's because the Amsterdam-based company used to be owned by a Russian search engine giant called Yandex. Following Russia's invasion of Ukraine, the U.S. imposed sanctions on Russian-affiliated companies. Earlier this year, the international assets were split off from Yandex in a $5.4 billion deal. Nebius was manifested to bear four divisions including cloud, data labeling, self-driving automobiles, and education technology, and Nebius began trading on the Nasdaq again on Oct. 21. Nebius is part of a growing list of companies that rent their infrastructure to AI companies. Powering AI is expensive and energy-intensive because it involves storing vast data quantities and hardware that powers AI language models. Nebius provides computing capabilities, storage, and tools and services for developers. The company's core AI platform is intended to handle massive AI workloads. Companies looking to develop AI capabilities can pay a subscription to use the infrastructure offered by companies like Nebius. It didn't take long for investors to discover Nebius -- the stock is up 55% on the year following the Nvidia news and plug from Citron. In a post on X, Citron's account called Nebius "a sleeper with no analyst coverage yet, the market hasn't caught on to its massive potential -- or its undervaluation vs. CoreWeave." CoreWeave is another AI infrastructure company rumored to be preparing a public offering that could value the company at $35 billion. If Nebius trades at a 50% discount to CoreWeave, that results in a $60 stock price, according to Citron. Nebius traded below $28 when Citron posted about it on Dec. 3. Citron also said that CEO Arkady Volozh, who resigned from the company after the initial sanctions but is now back, "is the real deal." The researcher also said that Nvidia had been waiting for the company to complete the spin-off from its Russian parent to announce the deal. Interestingly, Nebius on its website says its customers will be some of the first to use Nvidia's next-generation Blackwell platform. Nebius projects revenue will grow 200% to 300% in 2025 to a range of $500 million to $700 million. The company plans to spend anywhere from $600 million to $1.5 billion for more capacity at its data centers in Finland, France, and North America. It's always nice to find stocks you are interested in before they receive coverage on the Street. Wall Street analysts have the ears of many institutional investors at large funds that can move the needle, although the Nvidia investment and attention from Citron preempted some of this. Nebius is not yet profitable, but is growing revenue rapidly and has about $2.3 billion of cash on its balance sheet and very little debt. Nebius also operates in a huge market and already has some kind of partnership with Nvidia. Let's also not forget that it's in one of the hottest sectors of the stock market receiving huge valuations. Investors can certainly take a starter position. There may be some push and pull given the company's background, but the stock looks cheap compared to other AI names.

Andrew Left's Citron Research Says Nvidia-Backed Nebius Is The Next 'AI Wall Street Darling' -- Stock Moves Up 14% - GameStop (NYSE:GME)

Shares of Nebius Group NV NBIS jumped 13.90% on Tuesday after Citron Research highlighted the company's potential to become the next artificial intelligence sensation on Wall Street, citing its deep ties with NVIDIA Corp. NVDA and perceived undervaluation compared to competitor CoreWeave. What Happened: The surge followed Monday's announcement of a $700 million private placement financing round, backed by Nvidia, Accel, and accounts managed by Orbis Investments. The deal involves issuing 33,333,334 Class A shares at $21 each, representing a 3% premium over the volume-weighted average price since Nasdaq trading resumed. Citron Research, through its X social media account, projected a potential $60 share price for Nebius, based on what it called "napkin math" assuming a 50% discount to CoreWeave's multiple. The research firm said, "Citron pounding the table that Nebius is poised to be the next AI Wall Street darling," emphasizing CEO Arkady Volozh's credentials and Nvidia's decade-long relationship with the company. Volozh, a Russian technology entrepreneur and billionaire known for his expertise in computer science, expressed confidence in the company's direction. "The foundation of our business is our expertise in building advanced technology infrastructure," he stated, highlighting plans to expand AI infrastructure across two continents. See Also: Palantir Paving The Way For AI Transformation, With Salesforce And Oracle To Follow, Says Dan Ives: The AI Revolution Goes Beyond Magnificent 7 Why It Matters: The backing from Nvidia carries particular weight given the chip giant's dominance in AI computing. Citron noted that Nvidia's investment "was not out of the blue," pointing to their long-standing relationship and timing with complete divestiture. Citron's endorsement is notable given the firm's track record of market-moving calls. Its founder, Andrew Left, gained prominence for his contrarian positions, including his famous bearish stance on GameStop Corp GME in 2021 and recent skepticism about MicroStrategy Inc's MSTR Bitcoin BTC/USD driven rally. The stock continued its upward momentum in after-hours trading, gaining an additional 2.97%. With no current analyst coverage, Citron suggests the market has yet to fully recognize Nebius's potential in the rapidly expanding AI infrastructure space. Read Next: Bitcoin, Ethereum, Dogecoin Power Down Amid South Korea Political Turmoil: Analyst Shares Strategy For Altcoin Holders -- Avoid Chasing FOMO, Take Profits Image Via Shutterstock Disclaimer: 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 Group shares surge after Citron Research endorsement By Investing.com

On Monday, Nebius Group (NASDAQ:NBIS) experienced a notable increase in its stock price following positive remarks from Citron Research. The investment firm took to social media to express its bullish stance on Nebius Group, highlighting the company's potential in the artificial intelligence sector and its current undervaluation compared to its peer, CoreWeave. According to InvestingPro, investors seeking detailed valuation metrics and comprehensive analysis can access the Pro Research Report, which provides expert insights on over 1,400 US stocks. Citron Research's tweet emphasized their strong belief in Nebius Group's prospects, stating, "Citron pounding the table that $NBIS is poised to be the next AI Wall Street darling. A sleeper with no analyst coverage yet, the market hasn't caught on to its massive potential -- or its undervaluation vs. CoreWeave." They speculated that if Nebius Group were to trade at a 50% discount to CoreWeave's multiple, the stock could be valued at $60. The tweet also praised Nebius Group's CEO, Arkady Volozh, referring to him as "the real deal" and mentioning the strategic investment by Nvidia Corporation (NASDAQ:NVDA), which was not made spontaneously but was the result of a decade-long familiarity with Nebius Group. InvestingPro data shows NVDA's own impressive financial metrics, including a perfect Piotroski Score of 9 and remarkable revenue growth of 152% in the last twelve months. Citron Research further remarked on the company's strong financial position, calling it a "Fortress balance sheet." Following the tweet from Citron Research, Nebius Group's shares reached a session high, climbing 9.6%. This movement in the stock price underscores the impact that endorsements from recognized investment research firms can have on market perception and investor sentiment. For deeper insights into market movements and valuations, InvestingPro offers comprehensive financial analysis and real-time market intelligence.