Workflow
2 Hyper-Growth Tech Stocks to Buy in 2025
NBISNebius Group N.V.(NBIS) The Motley Fool·2025-02-23 14:21

Core Viewpoint - The announcement of DeepSeek's R1 large language model costing only 6millionhasraisedquestionsaboutthetruecostsofAIinfrastructuredevelopment,impactinginvestorsentimenttowardslargetechstocks,whilemajorcompaniescontinuetoplansignificantcapitalexpendituresforAIgrowthin2025[1][2][8]Group1:CompanyDevelopments−NebiusGroup,emergingfromtherestructuringofYandex,hasseena676 million has raised questions about the true costs of AI infrastructure development, impacting investor sentiment towards large tech stocks, while major companies continue to plan significant capital expenditures for AI growth in 2025 [1][2][8] Group 1: Company Developments - Nebius Group, emerging from the restructuring of Yandex, has seen a 67% gain year-to-date and is now focused on AI infrastructure and related businesses [3][4] - Nebius reported a significant revenue increase from 11.4 million in Q1 to approximately 38millioninQ4,withafull−yearrevenueof38 million in Q4, with a full-year revenue of 117.5 million for 2024, and aims for a 1billionannualrevenuerunratebytheendof2025[5]−ThecompanyendedQ4with1 billion annual revenue run rate by the end of 2025 [5] - The company ended Q4 with 2.45 billion in cash and negligible debt, representing over 25% of its total market cap of 9.3billion[5]Group2:InvestmentInsights−Nvidiaparticipatedina9.3 billion [5] Group 2: Investment Insights - Nvidia participated in a 700 million funding round for Nebius and holds over 1 million shares valued at about 33million,indicatingconfidenceinNebius′sgrowthpotential[6]−Majortechcompanies,includingMicrosoft,Meta,Amazon,andAlphabet,plantospendatleast33 million, indicating confidence in Nebius's growth potential [6] - Major tech companies, including Microsoft, Meta, Amazon, and Alphabet, plan to spend at least 300 billion on AI capital expenditures in 2025, supporting the ongoing growth of the AI sector [7] - Nebius's Avride business focuses on autonomous driving technologies, and the company's valuation appears reasonable with a forward enterprise value-to-sales ratio of less than 7 if it meets its revenue targets [12]