This Tech Stock Is Up Over 400%. Here's 1 Key Reason Why Smart Money Is Buying.

Core Viewpoint - Nebius Group, an AI-powered cloud infrastructure provider, has seen its shares increase by over 417% in the past year, indicating strong market interest and growth potential [1] Group 1: Institutional Interest - Institutional investors currently hold a 21.9% stake in Nebius Group, with total inflows of approximately $1.56 billion and outflows of $398.49 million over the last 12 months, reflecting a strong interest from smart money in the company's growth prospects [2] Group 2: Growth Catalysts - Nebius is transitioning from a niche cloud provider to a full-stack infrastructure platform, with near-peak utilization recorded in Q2, suggesting that new capacity will quickly sell out, leading to increased revenue and earnings [3] - The company has a significant deal with Microsoft worth $17.4 billion to supply GPU compute capacity over five years, potentially increasing to $19.4 billion, which enhances future revenue visibility [6] Group 3: Financial Projections - Analysts project Nebius' revenue to grow by approximately 392% year over year, reaching $578.16 million in fiscal 2025, although the company is not expected to be profitable [7] - Despite a high valuation of 114.9 times sales, this is typical for early-stage AI companies, suggesting that retail investors may consider acquiring a small stake [8] Group 4: Company Metrics - Nebius Group has a market capitalization of $28 billion, with a current stock price of $111.28 and a 52-week range of $17.39 to $141.10 [4][5] - The company anticipates its data center capacity to reach 220 megawatts by the end of 2025, with significant enhancements in network speed and software capabilities [5]