Will Nebius' AI Cloud 3.0 Rollout Strengthen its Competitive Moat?

Nebius Group N.V. (NBIS) has officially launched Nebius AI Cloud 3.0 “Aether,” a next-generation cloud platform purpose-built for enterprise-scale AI. As AI inference accelerates, traditional cloud systems often fall short—plagued by slow deployment, disjointed tools, and weak AI performance and security. Aether addresses these concerns with a secure, scalable, and developer-optimized infrastructure, empowering enterprises to deploy and scale AI workloads seamlessly from development to production.

Security and compliance are key to Nebius Aether's architecture. The platform includes SOC 2 Type II (with HIPAA) certification, ISO 27001 certification and alignment with ISO 27799, ISO 27701, NIS2, DORA and ISO 27032 regulatory principles. It features a built-in secrets manager to securely store API keys and credentials, as well as fine-grained control and governance mechanisms and developer-focused workflows for faster AI deployment. These functionalities are tailored for healthcare, finance and government data protection needs.

Nebius continues expanding its infrastructure footprint to better serve global enterprises, with deployments across the United States, Europe, the U.K. and the Middle East. It supports local data residency to meet regional compliance requirements and offers early access to next-gen GPU architectures, helping businesses stay ahead in AI innovation. Through partnerships with TD SYNNEX, Nebius now provides AI Infrastructure as a Service in North America, while collaborations with platforms like Anyscale, SkyPilot, Lightning AI and Saturn Cloud create a seamless ecosystem from procurement to deployment.

As AI becomes a vital driver of economic growth and global competitiveness, NBIS remains a leader in innovation, providing enterprises with advanced infrastructure and AI solutions that speed up transformation. Recently, it introduced its new Nebius AI Cloud in Israel, advancing the country's technological progress. The new AI data center is among the first in Israel to use NVIDIA Blackwell GPUs, helping local startups, enterprises and research institutes to innovate widely with state-of-the-art GPU technology.

The company is experiencing strong business momentum amid soaring demand for AI compute. With plans to further scale its platform this year, NBIS has raised its ARR outlook from $750 million–$1 billion to $900 million–$1.1 billion, reflecting solid contract wins and continued sales growth.

NBIS Faces Rising Competitive Heat in AI Infrastructure

CoreWeave (CRWV) continues to ramp up investments in data centers and server infrastructure to keep pace with the ongoing traction in customer demand. Recently, CRWV launched CoreWeave AI Object Storage, a fully managed service designed for AI workloads. Using its Local Object Transport Accelerator (LOTA) technology, it makes datasets instantly accessible globally with no egress or transaction fees. In June, it launched three new AI cloud products to help customers develop, deploy and iterate AI faster. This rollout marks the first software integration with Weights & Biases, following CRWV’s May 2025 acquisition. The new offerings give AI labs and developers a robust platform for model training, large-scale inference and production monitoring.

CRWV has a strong product roadmap and will launch new cloud services this year to boost AI growth and help customers meet evolving needs. Management has raised 2025 revenue guidance to $5.15-$5.35 billion from $4.9 billion to $5.1 billion projected earlier, citing accelerating demand and a robust pipeline.

Microsoft (MSFT) remains a dominant force in technology, leading cloud infrastructure through Azure while rapidly expanding in AI infrastructure. Recently, it unveiled AI innovations to streamline healthcare, ease care team workflows and improve financial management. It is enhancing its AI clinical assistant, Dragon Copilot, with the first ambient experience for nursing and new partner tools to extend its value.

Microsoft delivered exceptional growth across its Azure, AI and Copilot platforms during the fourth quarter of fiscal 2025, demonstrating the company's leadership in the AI transformation. The company added more than two gigawatts of new capacity and made every Azure region AI-first, with all locations now supporting liquid cooling for enhanced performance and flexibility. Microsoft projects Azure growth of 37% for the first-quarter fiscal 2026.

NBIS’ Price Performance, Valuation and Estimates

Shares of Nebius have gained 276.4% year to date compared with the Internet – Software and Services industry’s growth of 40.1%.

In terms of price/book, NBIS’ shares are trading at 6.51X, higher than the Internet Software Services industry’s ratio of 4.56X.

The Zacks Consensus Estimate for NBIS’ 2025 earnings has seen an upward revision 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.

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

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