Investors thinking capital spending to build artificial intelligence (AI) infrastructure will continue to soar were thrown a curveball earlier this year. China's privately held DeepSeek announced its new R1 large language model (LLM) cost only $6 million to build, and big AI tech stocks plunged.
Nebius Group N.V. is an AI infrastructure firm, recently reintroduced to the market after splitting from Yandex and shedding Russian ties. The company operates globally, offering AI-centric cloud platforms and full-stack infrastructure, including large-scale GPU clusters and tools for developers. Q4 Earnings were a mixed catalyst, but there was a clear growth narrative present in the report.
In this video, I will cover Nebius Group's (NBIS -4.22%) recent earnings report and comments from management during the call. Watch the short video to learn more, consider subscribing, and click the special offer link below.
First public buy rating on Nebius Group N.V., following a buy at the author's investing service. Despite 'missing' revenue estimates, Nebius Group's core AI infrastructure business grew 602% year-over-year, with total revenue increasing 466% annually. The company is cash-rich with $2.45 billion, enabling continued expansion; ARR expected to reach up to $1 billion by year-end 2025.
Nebius Group N.V.'s Q4 report shows revenue hitting $37.9M, a 5.65x YOY increase, and improved EBITDA loss. The firm raised $700M from top-tier partners, ensuring sufficient cash reserves, and targets $750M-$1B ARR by December 2025. The firm has a cash pile of $2,449.6 million, its EBITDA loss is about $266.4 million for FY2024 (and trending lower.) No additional capital is required now.
There's another name emerging in the tech space. Nebius Group (NBIS) is gaining traction through its A.I. infrastructure business. George Tsilis notes the company's climb in stock price doesn't come without warnings. He discusses Nebius's turbulent history and volatility ahead for potential investors despite its value potential.
NBIS's Q4 performance is likely to have gained from strong AI and cloud investments. Yet, higher capital expenditure is expected to have impacted profitability.
Nebius Group N.V. is a European AI leader, backed by Nvidia. NBIS's AI-centric cloud platform offers a cost-efficient, vertically integrated stack, providing a significant strategic advantage in the AI IaaS market. Led by Arkady Volozh, a renowned IT visionary and one of Europe's most impactful CEOs, Nebius Group leverages deep experience in building comprehensive ecosystems.
Nebius Group's stock has surged over 100% in the past year, driven by its unique AI-native cloud platform and cost-effective solutions for SMBs and AI startups. The company's diversified ecosystem, including subsidiaries like Toloka AI and Avride, enhances its value proposition and creates cross-selling opportunities across multiple AI-driven industries. Strategic geographic expansion and a strong partnership with NVIDIA bolster Nebius's competitive edge, ensuring access to cutting-edge hardware and meeting growing computational demands.
For the last week, the financial world finally had something to talk about other than Nvidia
I believe Nebius stock is currently under the radar for many institutional investment firms in the US. There is barely any analyst coverage, despite the promising prospects of this company. I anticipate an increase in institutional interest as Nebius opens more customer hubs and new GPU clusters (i.e. data centers) in the US over the next 12 to 24 months. Nebius has a strong cash position close to $3 billion, NVIDIA backing, and a $1 billion data center expansion plan across both sides of the Atlantic.
Shares of Nebius Group NASDAQ: NBIS took a nosedive on Monday, plummeting nearly 40% following the release of DeepSeek's latest AI model. The shockwave of this announcement caused fear-driven sell-offs across AI and semiconductor stocks, with NBIS being one of the most brutal hits.