Nebius Group: Up 385%, Analysts Say It’s Still a Bargain

Key Points

• The company is demonstrating healthy top-line revenue growth and has guided a clear path toward reaching profitability in the near future.
• A specialized, full-stack platform for AI workloads gives Nebius a distinct competitive advantage over larger, general-purpose cloud providers.
• Wall Street analysts have a strong consensus of Buy ratings on the stock, projecting considerable upside based on the company's future growth potential.

The search for the next impactful name in artificial intelligence (AI) often leads investors to crowded fields. Yet, quietly capturing a significant market share is Nebius Group N.V. NASDAQ: NBIS.

This international AI cloud provider delivered a staggering 385% year-over-year revenue growth in its latest quarter.

This narrative of rapid expansion becomes even more compelling when you consider that the company is backed by a Buy consensus rating from Wall Street analysts, who see a clear path to significant upside, suggesting the market has yet to fully price in the company's potential.

Nebius Goes From Hyper-Growth to Profitable Growth

Nebius Group’s financial performance paints a clear picture of potent market demand. For the first quarter of 2025, the company reported revenues of $55.3 million (up 385% from last year). This growth was driven by its core business of providing the specialized infrastructure that companies desperately need to build and run sophisticated AI models.

For investors, top-line growth is compelling, but predictable revenue is even better. This is where Nebius’s Annualized Recurring Revenue (ARR) becomes a critical indicator. ARR, which measures predictable income from subscriptions, soared to $310 million by April 2025. This metric is highly valued because it signifies a stable and growing base of loyal customers, giving strong credibility to management’s full-year revenue guidance of $500 million to $700 million.

Of course, rapid growth often comes at the cost of profitability. However, Nebius has provided a clear catalyst for investors to watch. Management has confidently guided that it expects to reach adjusted EBITDA break-even in the second half of 2025. Achieving this milestone would be a significant de-risking event for the stock, demonstrating that the underlying business model is fundamentally sound and can generate profits even as it continues to invest in scaling its operations.

Nebius's Secret Sauce: The Full-Stack Advantage

In a market dominated by cloud titans, Nebius thrives not by competing head-on, but by specializing. The company has engineered a competitive advantage through its full-stack platform. This means it controls the entire technology pipeline, from designing its server hardware to writing the proprietary software that manages it. This integration enables a level of optimization that general-purpose clouds using off-the-shelf components cannot easily achieve.

The problem Nebius solves is specific. AI models require massive amounts of data to be processed simultaneously across thousands of computer chips. A general-purpose cloud can create bottlenecks, slowing down training and increasing costs. The Nebius platform is purpose-built to handle these intensive, parallel workloads with maximum efficiency.

This technical expertise is validated by its key industry partnerships. As a launch partner for NVIDIA’s NASDAQ: NVDA latest chips, Nebius ensures its clients get early access to the most powerful AI hardware available, creating a significant advantage in a fast-moving industry. This focus is further sharpened by strategic decisions, such as the recent deconsolidation of its Toloka data unit, which enables the company to concentrate all its resources on its core, high-margin AI infrastructure business.

A Billion-Dollar Bet on Growth

An ambitious vision requires the capital to make it a reality. Nebius recently secured its financial future with a $1 billion convertible note offering. Convertible notes are a hybrid security that starts as debt but can convert into stock later, a method often used by growth companies to raise capital with less immediate dilution to existing shareholders. This billion-dollar war chest ensures Nebius has the funding to aggressively expand its data center footprint and acquire the compute power needed to meet customer demand, directly fueling its future revenue.

Beyond capital, Nebius has attracted validation from the highest levels of the tech world. A recent strategic investment in its Toloka business was led by Bezos Expeditions, the personal investment firm of Amazon founder Jeff Bezos. This kind of smart money validation provides far more than just cash; it confers immense credibility. The association with a name like Bezos signals a strong belief in the company's technology and long-term vision, which can attract other top-tier investors, partners, and talent.

Why Nebius May Still Be Undervalued

The ultimate question for investors is what a stock is worth. While Nebius is not yet profitable by standard accounting, Wall Street is looking ahead. All six analysts covering the company rate the stock a Buy, reflecting a strong consensus among professionals that its future is bright.

This optimism is reflected in their price targets. The average twelve-month forecast for Nebius is $66.50 per share, which represents a potential upside of over 40% from its current price. The highest target is set at $84.00, suggesting that some analysts believe the growth potential is even greater. For a hyper-growth company, valuation is often less about past performance and more about future potential. Analysts are signaling that as Nebius continues to execute on its growth plan and reaches its profitability goals, its stock price will be rerated higher to match its standing as a critical player in the AI ecosystem.

Nebius Group is charting a compelling course in the competitive AI landscape. With verifiable hyper-growth, a differentiated technology stack, and the strong backing of both Wall Street and elite investors, the company presents a clear, data-driven case for investors seeking a focused, high-potential play on the future of artificial intelligence.