Nebius Group Today
As of 04:00 PM ET
- 52 week range
- $14.09
▼
$38.69
Many small and medium-sized companies have captured the attention of investors over the past year thanks to NVIDIA Nasdaq: NVDA Disclosure of investments in these companies. One of the most prominent modern companies is the Nebius Group Nasdaq:NBISa technology company that is now drawing comparisons to other NVIDIA-backed successes like SoundHound AI NASDAQ:SOUNWhich rose more than 800% last year.
Despite this correlation, Nebius has faced challenges, with its stock down nearly 20% from its 52-week high in December. But does NVIDIA’s participation indicate a buying opportunity? Let’s dig deeper.
What is Nebius Group?
Nebius Group NV is a Netherlands-based technology company specializing in AI-based solutions for businesses and consumers. Its key offerings include Nebius AI, a cloud platform designed to deploy artificial intelligence and machine learning; Toloka AI, which focuses on generative AI applications such as model training and data generation; Avride, a provider of autonomous vehicle solutions for logistics and passenger transportation services; and TripleTen, an EdTech platform that equips learners with STEM and technology skills.
Formerly known as Yandex NV, the company has undergone a transformation following sanctions imposed on Russia following its invasion of Ukraine. Yandex divested its non-Russian assets, leading to Nebius’ independence and subsequent listing on the Nasdaq in October 2024.
After its debut, Nebius raised $700 million through a private placement involving NVIDIA and Accel Ventures.
Why does NVIDIA care?
NVIDIA’s investment is consistent with Nebius’ strong growth trajectory and focus on AI infrastructure. In Q3 2024, Nebius reported revenue of $43.3 million, an increase of nearly 200% sequentially. The AI Infrastructure segment showed exceptional growth, expanding approximately 300% quarter-on-quarter and approximately 650% year-over-year, showcasing the rapid progress the company has made in its core AI offerings.
The AI cloud business is on track to achieve an annual run rate of $120 million, while forward guidance estimates revenue between $750 million and $1 billion by 2025.
Nebius’ strategic initiatives include expanding its data center footprint. It recently launched a GPU-equipped facility in Kansas City and plans to open another US cluster by 2025, enhancing its AI infrastructure capabilities. Through partnerships such as its collaboration with Uber Technologies for autonomous vehicles, Nebius leverages its diverse portfolio to drive innovation.
The NVIDIA factor and Citron’s bullish call
NVIDIA’s backing has sparked optimism, which has been further amplified by Citron Research’s endorsement of Nebius as an “AI darling of Wall Street.” Citron sees similarities between Nebius and competitors like CoreWeave, and expects the stock price to reach $60 per share, providing significant upside from current levels.
Nebius plans to invest $1 billion in AI infrastructure by 2025, with a focus on leasing capabilities to organizations that are scaling up their AI operations. This capital commitment reflects its ambition to establish a strong foothold in the fast-growing artificial intelligence sector.
Why Nebius is a unique play on AI infrastructure
While NVIDIA’s support and Citron’s bullish outlook are compelling, investing in Nebius comes with risks. The company faces stiff competition from established players. However, its financial strength, backed by nearly $2.3 billion in cash and rapid revenue growth, positions it as a high-potential opportunity for risk-tolerant investors.
Real potential also lies in Nebius’ ability to leverage its partnership with NVIDIA to secure relationships with other industry leaders, such as Advanced Micro Devices Nasdaq: AMD The Magnificent Seven are tech giants and cloud specialists like Microsoft Nasdaq: MSFT And Amazon Nasdaq: AMZN. If successful, Nebius could unlock significant long-term value and explosive growth, positioning it as a niche in the AI and technology space.
Nebius Group offers a unique blend of opportunity and risk for investors seeking exposure to emerging AI infrastructure plays. NVIDIA’s involvement certainly adds an extra layer of intrigue.
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