Key Points Nebius has soared this year on blockbuster revenue growth. The company recently signed a $17.4 billion deal with Microsoft. It's a high-risk stock that's likely to move with the broader AI narrative. 10 stocks we like better than Nebius Group › Nebius (NASDAQ: NBIS) has been one of the most explosive stocks on the market this year. The artificial intelligence (AI) cloud infrastructure, or neocloud, company evolved out of the Russian tech company Yandex, which was delisted from the Nasda ...

Core Insights - Nebius Group N.V. (NBIS) has shown significant stock performance, gaining 25.4% in the past month, outperforming the Zacks Computer & Technology sector and the Zacks Internet Software Services industry's growth of 6.1% and 12.6% respectively [1] - The stock surged 42% following a major AI infrastructure deal with Microsoft Corporation (MSFT) announced on September 8 [4] - Nebius reported a remarkable 625% year-over-year revenue increase to $105.1 million, driven by the demand for AI cloud infrastructure [5] Price Performance - The stock's recent performance is attributed to the increasing demand for AI infrastructure and the substantial deal with Microsoft [8] - The annualized run rate (ARR) guidance has been raised to between $900 million and $1.1 billion, reflecting strong contracted pipeline visibility [11] MSFT Deal & Other Tailwinds - The agreement with Microsoft is valued at approximately $17.4 billion through 2031, with potential additional services raising the total to around $19.4 billion [6] - Nebius is positioned to benefit from the growing demand for GPU-intensive data centers, with plans to secure 220 megawatts of connected power by 2025 [10] Competitive Landscape - The AI cloud infrastructure market is highly competitive, with major players like Amazon and Microsoft dominating the space [15][16] - Nebius faces pricing pressure and higher customer acquisition costs due to intense competition [16] Financial Considerations - Nebius has reaffirmed a $2 billion capital expenditure (capex) guidance for 2025, which is significant given the recent capital raised of nearly $4.2 billion [17] - The company’s valuation appears stretched, trading at a Price/Book ratio of 5.68X compared to the industry average of 4.45X [22][23]