Nebius Group (NASDAQ: NBIS) has emerged as one of the most exciting small-cap plays in the AI infrastructure space. Over the past week, its stock has soared nearly 45%, pushing YTD gains to an impressive 64%. This rally comes after the company announced a $700 million private placement involving high-profile investors, including NVIDIA (NASDAQ: NVDA), Accel, and other institutional backers. The investment has not only injected fresh capital into Nebius but also solidified its position as a credible player in the rapidly expanding AI sector, drawing attention from both retail and institutional investors.
A Transformative Play in AI Infrastructure
Nebius develops cutting-edge AI-centric infrastructure, including GPU clusters, cloud platforms, and tools for machine learning applications. Its offerings include Toloka AI, a solution supporting every stage of the GenAI lifecycle, Avride, an autonomous mobility platform for ride-hailing and logistics, and TripleTen, an EdTech service focused on equipping students with essential STEM skills.
Based in Amsterdam and led by former Yandex CEO Arkady Volozh, Nebius reentered the market in October 2024 after splitting from Yandex's Russian assets in a $5.4 billion deal. This strategic pivot allowed the technology company to shed geopolitical risks and position itself as a global player competing with tech giants like Amazon (NASDAQ: AMZN) and Microsoft (NASDAQ: MSFT).
Recent Catalysts Propel NBIS
NVIDIA’s involvement in Nebius’s $700 million funding round is a powerful endorsement, validating its growth potential. This capital will enable Nebius to scale its GPU clusters, which is crucial for AI deployment. The announcement has also drawn praise from Citron Research, which referred to Nebius as a "future AI Wall Street darling," highlighting its underappreciated potential compared to competitors like CoreWeave. Citron estimates the stock could reach $60 per share, a significant upside from current levels.
Operationally, Nebius is executing an ambitious expansion strategy. It recently launched a GPU-powered data center in Kansas City, with another U.S.-based facility in the advanced planning stages for 2025. The firm also maintains a large-scale data center in Finland, underlining its dual-continent infrastructure strategy to support growing global AI demand.
Positioned to Execute on Growth Plans
Nebius plans to invest $1 billion in AI infrastructure by 2025, renting capacity to enterprises looking to scale their AI operations. The company recently raised its revenue guidance, projecting an annualized revenue run rate between $750 million and $1 billion by the end of 2025, up from prior estimates of $500 million to $1 billion. With almost $2 billion in cash reserves and minimal debt, Nebius is financially positioned to execute its growth plans effectively.
Should You Invest Before Wall Street Notices?
The company currently lacks analyst coverage, making it an intriguing opportunity for early investors. NVIDIA’s strategic investment and Citron’s bullish forecast suggest the company is well-positioned to capitalize on the surge in demand for AI infrastructure. While challenges remain, including its unprofitable status and competition from established giants, Nebius’s financial strength, rapid revenue growth, and presence in one of the hottest market sectors make it a compelling option for investors willing to embrace some risk.
The stock's recent pullback of 6% from 52-week highs could present a timely entry point for those seeking to enter the AI race before broader institutional recognition. For the conservative investor looking to initiate a small speculative position, the prudent approach might be to wait for price to retrace to previous resistance near $25. If that key area holds as newfound support, it would indicate that buyers have stepped higher and the stock is conforming to a fresh uptrend.
