Nebius Group vs. Amazon: Which AI Cloud Stock Has More Room to Run?

Nebius Group N.V. NBIS and Amazon.com, Inc. AMZN are major players in the rapidly expanding AI cloud infrastructure market. Amazon, through its Amazon Web Services (“AWS”) division, remains the industry’s most diversified and cash-generating cloud powerhouse. Its strengths lie in vast data center capacity, proprietary chips like Trainium and deep enterprise penetration. Nebius, by contrast, is an emerging challenger, nimble, fast-growing and laser-focused on AI compute infrastructure.

According to an IDC report, spending on AI infrastructure is expected to top $200 billion by 2028. This uptrend in spending benefits both Amazon and Nebius, but not equally. They differ sharply in scale and growth trajectory. So, for investors looking to make a smart move in the AI infrastructure space, which stock truly stands out?

Let’s analyze their fundamentals, growth opportunities, market challenges and valuation to assess which one presents a stronger investment opportunity.

The Case for NBIS

Nebius, an Amsterdam-based AI infrastructure provider, has grown rapidly in 2025 amid soaring demand for AI cloud services driven by the expansion of generative AI, machine learning and high-performance computing applications. Strong demand for its copper GPUs and near-peak GPU utilization has benefited results, with Nebius reporting a ninefold surge in AI cloud revenue in the second quarter of 2025. The company’s total revenues soared 625%, driven by strong performance in its core business and outstanding execution by the TripleTen team. Nebius’ core business revolves around its AI cloud platform, purpose-built for intensive workloads and powered by proprietary software and hardware developed through its R&D hubs.

The company stands to gain from its product launches. Recently, Nebius launched Nebius AI Cloud 3.0 “Aether,” a next-generation cloud platform designed for enterprise-scale AI. As AI inference adoption accelerates, traditional cloud systems have struggled with slow deployment, fragmented tools and limited AI performance and security.

The company has upgraded its cloud software to support growing capacity and large-scale clusters, expanded its customer base with leading tech firms such as Cloudflare, Prosus and Shopify, and strengthened its position as the go-to cloud provider for AI-native startups. AI compute demand is growing fast, and the company is expanding capacity to drive growth in 2026 and beyond. 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.

However, broader macroeconomic uncertainties and heavy capital spending weigh on NBIS’ growth trajectory. NBIS has reaffirmed its 2025 capex guidance at $2 billion. Now, $2 billion capex is a huge cash outlay even with a $4 billion capital raised to date. Elevated Capital expenditure levels pose a risk if revenue growth fails to keep pace with the company’s capital intensity, particularly in an environment where AI demand may fluctuate amid competitive pricing pressures and evolving regulatory frameworks.

Moreover, scaling aggressively (multiple data centers in various regions) involves execution risk. Also, Nebius faces tremendous competition in the AI cloud infrastructure space, which boasts behemoths like Amazon, Microsoft and Alphabet, as well as small players like CoreWeave.

The Case for AMZN

Amazon continues to assert its dominance in the global cloud and AI infrastructure market through AWS. In the third quarter of 2025, AWS achieved $33 billion in revenue, marking 20.2% year-over-year growth. The surge was driven by strong demand for generative AI, inference workloads and custom silicon solutions. With an annualized revenue run rate of $132 billion, AWS remains the backbone of the AI revolution, enabling enterprises to train, deploy and scale large language models and AI agents.

A major growth driver for AWS is its proprietary silicon, particularly its Trainium and Graviton chips. Amazon’s Trainium2 has rapidly evolved into a multibillion-dollar business, growing 150% quarter over quarter and powering massive AI clusters such as Project Rainier, which includes nearly 500,000 Trainium2 chips, expected to double by year-end. AWS is already preparing Trainium3, expected to offer another 40% efficiency improvement.

Amazon is rapidly expanding its AI software ecosystem. Its Bedrock platform offers access to multiple foundation models, while SageMaker simplifies AI development and deployment. The new AgentCore framework enables secure, large-scale deployment of AI agents, already adopted by Ericsson, Sony and Cohere Health to enhance efficiency. Tools like Strands and Quick Suite further integrate AI into enterprise workflows.

To meet surging AI demand, Amazon is undertaking one of the largest infrastructure expansions in tech history, adding 3.8 gigawatts of power in the past year, doubling capacity since 2022, and aiming to double again by 2027. In the final quarter of 2025, the company plans to add at least another 1 gigawatt of capacity.
For fourth-quarter 2025, net sales are projected to range between $206.0 billion and $213.0 billion, indicating year-over-year growth of 10% to 13%.

NBIS Shares vs. AMZN

Over the past month, NBIS shares have gained 11.8% while AMZN stock has increased 11.4%.

Valuation for NBIS & AMZN

Valuation-wise, Nebius is overvalued while Amazon is undervalued, as suggested by the Value Score of F and A, respectively.

In terms of Price/Book, NBIS shares are trading at 7.75X, higher than AMZN’s 7.12X.

How Do Zacks Estimates Compare for NBIS & AMZN?

Analysts have significantly revised their earnings estimates for NBIS’ bottom line for the current year.

For AMZN, there is a marginal upward revision.

NBIS or AMZN: Which is a Better Pick?

NBIS carries a Zacks Rank #4 (Sell) at present, while AMZN has a Zacks Rank #2 (Buy). Consequently, in terms of Zacks Rank, AMZN seems to be a better pick at the moment.

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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