Yahoo Finance·2025-09-11 11:05Core Insights - Nvidia predicts AI infrastructure spending could reach $4 trillion by the end of the decade, indicating significant growth potential for Nebius [1] - Nebius recently secured a $17 billion deal over five years with Microsoft to provide AI infrastructure [2] - Nebius reported a 625% revenue surge in the recent quarter, with an adjusted EBITDA achieved ahead of schedule, and raised its annual revenue run rate forecast to $900 million to $1.1 billion from $750 million to $1 billion [3] Company Overview - Nebius operates in the cloud infrastructure-as-a-service market, renting out AI infrastructure such as compute and software for AI workloads [4] - The company is positioned to attract major customers, particularly in light of its recent deal with Microsoft [2][3] Market Context - The AI boom continues to present substantial growth opportunities, with many companies experiencing significant stock price increases [6] - Nvidia has established itself as a leader in AI chip production, with demand for its GPUs consistently outpacing supply [7][9] Financial Performance - Nvidia's revenue exceeded $130 billion last year, with gross margins surpassing 70% in recent quarters, reflecting strong profitability [8][9] - Nebius' stock surged nearly 50% following the Microsoft deal, now trading at 40 times forward sales estimates, up from 24 [11] Investment Considerations - Nvidia is viewed as a more established investment opportunity, trading at less than 40 times forward earnings estimates, compared to Nebius' higher valuation [12]