Nebius Group N.V. (NBIS): A Bull Case Theory

We came across a bullish thesis on Nebius Group N.V. (NBIS) on wallstreetbets Subreddit Page by Europe-Trader-1991. In this article, we will summarize the bulls’ thesis on NBIS. Nebius Group N.V. (NBIS)'s share was trading at $37.56 as of May 19^th.

Nebius Group N.V. (NBIS) stands out as a compelling AI infrastructure investment, currently undervalued despite multiple strong growth drivers. The company’s revenue surged dramatically to $43.3 million in Q3 2024 from just $5 million a year earlier, fueled by soaring demand for AI infrastructure. Nebius projects an ambitious annualized run-rate revenue of $750 million to $1 billion by the end of 2025, up from $90 million at the close of 2024. This rapid expansion is backed by a $700 million private placement led by high-profile investors such as NVIDIA, Accel, and Orbis Investments, along with a $72 million investment from Bezos Expeditions in Nebius’ AI data business, Toloka, further bolstering growth potential.

The company is aggressively investing over $1 billion in AI infrastructure, developing GPU clusters across Kansas City, New Jersey, Paris, and tripling capacity in Finland, all powered by NVIDIA’s cutting-edge GPUs like H200 and Blackwell. Nebius offers a full-stack AI-native cloud platform and Nebius AI Studio, supporting the entire machine learning lifecycle with proprietary technology and a team of 850 AI engineers, positioning it competitively in the market.

Analysts are highly optimistic, with buy ratings from DA Davidson and BWS Financial, and a $60 price target from Citron Research, highlighting Nebius as an “AI Wall Street darling” due to its NVIDIA partnership and undervaluation versus peers like CoreWeave. The company holds nearly $3 billion in cash post-fundraise with minimal debt, well-positioned to execute growth despite current unprofitability. Beyond core infrastructure, Nebius also runs rapidly growing subsidiaries Toloka, TripleTen (edtech), and Avride, an autonomous driving software platform partnered with Hyundai, Uber Eats, and Grubhub, expected to rank among the top three in the autonomous vehicle sector. With a 28% stake in Clickhouse valued at $6 billion, Nebius’ overall holdings potentially exceed $1.7 billion, underscoring its diverse AI ecosystem and significant upside potential.

Nebius Group N.V. (NBIS) is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 66 hedge fund portfolios held NBIS at the end of the fourth quarter which was 10 in the previous quarter. While we acknowledge the risk and potential of NBIS as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than NBIS but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

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Disclosure: None. This article was originally published at Insider Monkey.