A lesser-known player in the AI space, Nebius Group (NBIS), is garnering attention due to its association with semiconductor giant Nvidia. With shares soaring by 950% over the last year, some analysts may consider it a lucrative opportunity. However, before making a decision, investors should weigh the pros and cons.
Nebius was formed as an independent entity following Yandex’s divestment of non-Russian assets due to sanctions imposed on Russia. The company recently raised $700 million through a private placement featuring Nvidia and venture capital firm Accel. Its primary market is AI infrastructure, with notable areas including graphics processing units (GPU) clusters and cloud-based platforms.
The growth prospects for Nebius appear promising, with revenue increasing by 766% year over year to $43.3 million. The company’s forward guidance projects annual recurring revenue (ARR) run rate of up to $1 billion by the end of 2025, driven largely by Nvidia’s ongoing Blackwell GPU roll-out.
Despite a relatively limited trading history, Nebius boasts substantial liquidity with $2.3 billion in cash and equivalents. Its expansion plans, including a $1 billion data center expansion, are further backed by strong demand for Nvidia GPU clusters.
To maximize its potential, investors should consider Nebius’ strategic partnerships with other chip players and cloud hyperscalers. With an international presence providing diversification benefits, Nebius Group is worth monitoring in 2025.
Before investing, it’s essential to evaluate the broader landscape of AI investments. Analysts from The Motley Fool identified their top picks for investors, but Nebius was not included on that list. Ultimately, patient investors should carefully assess Nebius’ potential and consider its alignment with their investment goals.
Source: https://finance.yahoo.com/news/1-nvidia-backed-artificial-intelligence-131500787.html