Will NBIS' Tie-Up With NVDA Accelerate its AI Infrastructure Growth?

Core Insights - Nebius Group N.V. (NBIS) is enhancing its partnership with NVIDIA (NVDA) to provide next-generation AI infrastructure globally, reporting a 385% year-over-year revenue growth in Q1 [1] - The company aims for a recurring revenue run-rate of $750 million to $1 billion by 2025, although adjusted EBITDA is expected to remain negative for the year [1] - The global AI market is projected to reach $1.01 trillion by 2031, growing at a CAGR of 26.6% from 2025 to 2031, which presents a favorable environment for Nebius [1] AI Infrastructure Development - The Blackwell platform enhances inference performance, allowing businesses to achieve faster and more accurate AI model outcomes, positioning NBIS to meet enterprise demand for scalable AI solutions [2] - NBIS has launched the NVIDIA GB200 Grace Blackwell Superchip for European clients, marking significant progress in building a global AI infrastructure [2] - The deployment of NVIDIA Blackwell Ultra GPUs in the U.K. is expected to enhance the digital infrastructure and support economic growth across various sectors, including public services [3] Competitive Landscape - Nebius faces competition from major players like Microsoft (MSFT) and CoreWeave, Inc. (CRWV) in the AI infrastructure space [5] - CoreWeave operates a network of 33 data centers and collaborates with NVIDIA to implement GPU technologies for AI workloads [6] - Microsoft strengthens its position in AI infrastructure through its Azure platform, which has over 60,000 AI customers and continues to grow [7] Financial Performance - Nebius shares have increased by 74.4% year-to-date, outperforming the Internet-Software and Services sector growth of 23% [9] - The company trades at a forward price-to-sales ratio of 11.19X, significantly higher than the industry average of 4.01 [10] - The Zacks Consensus Estimate for NBIS' earnings for 2025 has remained unchanged over the past 30 days [11]