Nebius Sees Robust AI Cloud Growth: Will the Momentum Continue?

Core Insights - Nebius Group N.V. (NBIS) is experiencing significant growth due to the rising global demand for AI computing power, particularly in AI-focused cloud services [1][2] - The company reported a remarkable 625% year-over-year revenue increase, reaching $105.1 million in Q2 2025, driven by strong performance in its core AI cloud platform [3][10] - Nebius has raised its annualized run rate (ARR) revenue guidance to a range of $900 million to $1.1 billion, while maintaining its core business revenue outlook of $400 million to $600 million [5][10] Business Developments - Nebius signed a five-year, $17.4 billion AI infrastructure deal with Microsoft, which could expand to $19.4 billion, enhancing its position in the AI cloud market [6][10] - The company has upgraded its cloud software to support larger capacities and clusters, and expanded its customer base to include major tech firms like Cloudflare, Prosus, and Shopify [4][10] - Nebius continues to see strong momentum in AI compute demand, indicating a positive outlook for growth in 2026 and beyond [5] Competitive Landscape - Nebius faces competition from major players like Microsoft and CoreWeave, which are also advancing their AI capabilities and cloud infrastructure [7][8] - CoreWeave has reported significant achievements, including a $4 billion expansion with OpenAI, and has raised its 2025 revenue guidance to $5.15–$5.35 billion [11][12] Market Performance - Shares of Nebius have surged 358.3% over the past six months, significantly outperforming the Internet – Software and Services industry's growth of 37.3% [13] - The company's shares are currently trading at a price/book ratio of 7.07X, higher than the industry's ratio of 4.48X [14]