Nebius Races Ahead in AI Infra Space With Strong Customer Engagement

Europe-based Nebius Group N.V. (NBIS) is an emerging player in the AI domain. It serves a broad range of customers through its robust Nebius cloud platform, supporting both managed and self-service users across industries like tech, media, life sciences and more. With growing global capacity and 24/7 expert support on both sides of the Atlantic, it delivers tailored solutions that go beyond standard GPU-as-a-service offerings.

This reflects NBIS's flexibility and ability to quickly adapt to the evolving needs of a diverse customer base, delivering high-quality solutions powered by its advanced tech stack. Customers value its AI-specialized cloud and hyperscaler-level capabilities. These strengths contributed to strong first-quarter results. Demand for AI compute remains high, with the sales momentum continuing in the second quarter. Its annualized run rate revenue reached $310 million in April, with strong demand.

Reportedly, in May 2025, NBIS was selected by the Israel Innovation Authority to build the country’s national AI supercomputer as part of Phase II of the National AI Program. The total project budget is reportedly more than NIS 500 million ($140 million), including a government grant of NIS 160 million, positioning this initiative as a flagship AI infrastructure effort for the country.

Its recurring revenue model is growing, with management targeting a $750 million–$1 billion run-rate by 2025. While adjusted EBITDA is likely to remain negative for the full year, Nebius expects it to become positive at “some point in the second half of 2025.”

How NBIS’ Rivals are Winning the AI Game

U.S.-based AI-infrastructure company CoreWeave (CRWV) is a hyperscaler focused on AI, offering a cloud platform built to scale and accelerate generative AI workloads. It operates a network of 33 data centers across the United States and Europe, supported by 420 megawatts of active power. The company works closely with NVIDIA to deploy its GPU technologies at scale and was among the first to bring NVIDIA H100, H200 and GH200 clusters into production for AI use cases. Its cloud infrastructure is also optimized for NVIDIA’s GB200 NVL72 rack-scale systems.

For 2025, CoreWeave has guided revenues to be in the range of $4.9-$5.1 billion, fueled by surging AI-infrastructure demand.

Tech giant Microsoft Corporation (MSFT) is a major player in AI infrastructure with its Azure platform, backed by a wide global data center network. When it comes to cloud migrations, Microsoft continues to see customers like Abercrombie & Fitch Co., Coca-Cola and ServiceNow expanding their footprints on Azure. Microsoft remains the cloud of choice for customers’ mission-critical VMware, SAP and Oracle workloads, with more regional availability than any other hyperscaler. MSFT’s multi-billion-dollar investment in OpenAI has significantly boosted its position in the AI space, whereas NBIS is still in the early phase of developing its network of strategic partners.

The growing uptake of Azure OpenAI and Copilot in Microsoft 365, Dynamics 365 and Power Platform is noteworthy. With Azure AI, MSFT is creating a strong platform for the AI era, offering a wide range of models to suit different customer needs.

NBIS Price Performance, Valuation and Estimates

Shares of Nebius have gained 87.3% year to date compared with the Internet – Software and Services industry’s growth of 30%.

In terms of price/book, NBIS’ shares are trading at 3.87X, down from the Internet Software Services industry’s ratio of 4.31X.

The Zacks Consensus Estimate for NBIS’ earnings for 2025 has been unchanged over the past 30 days.

NBIS currently carries a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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