Will Nebius' Toloka and ClickHouse Stakes Fund Its AI Expansion?

Nebius Group N.V. NBIS is an Amsterdam-based AI infrastructure neo cloud company. NBIS is witnessing hyper revenue growth (up 625% last quarter) as demand for AI infrastructure has exploded, fueled by the increasing usage of generative AI, machine learning and high-performance computing applications. AI cloud infrastructure revenues grew more than nine times year over year, driven by demand for copper GPUs and near-peak GPU utilization. Nebius recently signed a massive $17.4 billion deal with Microsoft MSFT that provides dedicated GPU capacity to the latter from its new data center in Vineland, NJ.  

NBIS is aggressively ramping up its AI infrastructure footprint, with new data centers under construction across New Jersey, the United Kingdom and Israel along with capacity expansion in Finland to meet customer demand. The company is targeting nearly 1 gigawatt of total capacity by 2026 as it scales to meet soaring global demand for AI compute. But such rapid expansion requires significant capital and investors are increasingly focused on how Nebius plans to fund this next growth phase.

On the last earnings call, management highlighted it has significant cash in hand and that it would “approach any additional capital raising opportunistically” depending on timing and market conditions.  Apart from this, investors also need to look at the company’s non-core businesses and other equity stakes such as Avride, ClickHouse and Toloka that could emerge as powerful value drivers. ClickHouse stake is a standout. NBIS has a 28% stake in ClickHouse, which has a valuation of around $6 billion presently, which translates into a ready capital source if monetized. Other stakes include Toloka, a data partner for all stages of AI development, TripleTen, an edtech platform, and Avride, an autonomous vehicle platform.

Toloka recently raised growth capital in a round led by Bezos Expeditions and others, underscoring strong investor confidence in its AI data business. NBIS believes there is “very significant upside” to Toloka’s future valuation and growth, and would consider monetizing this stake in the future to support capital needs for core operations. It retains a significant majority economic interest in Toloka.

These various stakes give Nebius a unique edge among AI-infrastructure players. Nebius underscored that it was confident to monetize these businesses effectively and fuel the core business while minimizing dilution to existing shareholders and keeping debt in check. For investors, these hidden value drivers may represent the next leg of the company’s valuation uplift.

Let’s Look at Financial Resources for Competitors

Microsoft is both a client and competitor for NBIS. The company is investing aggressively in AI infrastructure, including building its custom AI chips like Azure Maia and Azure Cobalt. Microsoft is rapidly expanding data center footprint and has altered every Azure region into an AI-first environment with liquid cooling capabilities, positioning itself at the forefront of the AI infrastructure wave. Over the past year, it has added more than 2 GW of new datacenter capacity. It now has over 400 datacenters across 70 regions.

MSFT’s financial resources can dwarf any competition. It had a cash pile of $94.56 billion at the end of the last reported quarter. Given this, the company is planning more than $30 billion in capital expenditures for the first quarter of fiscal 2026 alone. In contrast, Nebius’ capex for 2025 is pinned at $2 billion.

CoreWeave CRWV is offering some serious competition in the AI infrastructure space. Recent deal win with Meta Platforms and expansion of contract with OpenAI not only enhances revenue visibility for CRWV but also validates its AI infrastructure as cutting-edge and reliable. To meet demand, CRWV is aggressively building out its data center network and targets 900 MW of active power by year-end. Key projects include a $6 billion data center investment in Lancaster, PA and another data center in Kenilworth, NJ, through a joint venture with Blue Owl.

As of June 30, 2025, CRWV had $1.7 billion in cash, cash equivalents and restricted cash. However, CRWV has been funding an expansion strategy through hefty leverage. On the last earnings call, CRWV noted that it raised a staggering $25 billion in debt and equity since 2024. CRWV expects capex at $20-$23 billion for 2025. Hefty leverage leads to ballooning interest expenses, which can undermine profitability.

NBIS Price Performance, Valuation and Estimates

Shares of Nebius have gained 30.7% in the past month against the Internet – Software and Services industry’s decline of 0.1%.

In terms of price/book, NBIS’ shares are trading at 7.68X, higher than the Internet Software Services industry’s ratio of 4.61X.

The Zacks Consensus Estimate for NBIS’ earnings for 2025 has been revised upwards over the past 60 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.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

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

Zacks Investment Research