Key Takeaways NBIS shares jumped nearly 74% in six months, far outpacing its sector and industry peers.NBIS is scaling AI infrastructure fast, backed by multibillion-dollar hyperscale contracts.NBIS faces rising costs, heavy capex, execution risks and a valuation premium that could pressure returns.Nebius Group N.V. (NBIS) stock has gained 73.8% in the past six months, outperforming the Zacks Computer & Technology sector and the Zacks Internet Software Services industry’s growth of 22.7% and 2.1%, respectiv ...

Core Insights - CoreWeave, Inc. (CRWV) is enhancing its position in the high-performance AI cloud market through the expansion of its Mission Control platform, which is designed for enterprise tech teams to manage large-scale AI workloads [1][2] - The latest updates to Mission Control include features such as Telemetry Relay, GPU Straggler Detection, and a new Mission Control Agent, which improve observability, troubleshooting, and compliance for enterprise applications [2][3] Mission Control Enhancements - Mission Control is integral to managing GPU fleets and system performance, with the new update providing tools for better visibility and reliability in AI workloads [2] - Telemetry Relay allows for direct streaming of audit and access logs into customer systems, while GPU Straggler Detection identifies performance bottlenecks in distributed training [2] - The Mission Control Agent offers real-time insights and actionable guidance, aiding teams in diagnosing issues quickly [3] Enterprise Adoption and Customer Base - CoreWeave is gaining traction with significant enterprise clients, including CrowdStrike for AI cybersecurity and Rakuten for visual language models [3] - The company has also expanded its customer base to include a top software design platform and a large U.S. telecommunications company [3] Supply Constraints and Revenue Outlook - CoreWeave is currently facing supply constraints, with demand exceeding capacity, leading to data-center delivery delays [4] - As a result, management has revised its 2025 revenue forecast to $5.05–$5.15 billion from $5.15–$5.35 billion, and adjusted operating income expectations to $690–$720 million from $800–$830 million [4] Competitive Landscape - Major competitors like Microsoft are expanding their AI capabilities significantly, with plans to increase AI capacity by over 80% in 2025 and expecting Azure revenue growth of about 37% [5] - Nebius Group N.V. is also targeting substantial growth, aiming for $7–$9 billion in annual recurring revenue by 2026, despite facing similar supply constraints [6] Stock Performance and Valuation - CoreWeave's shares have increased by 126.6% over the past year, significantly outperforming the Internet Software industry, which grew by only 2.6% [9] - The current Price/Book ratio for CRWV is 11.42X, notably higher than the industry average of 5.99X [10]

Core Insights - The AI revolution is shifting investment focus towards infrastructure rather than applications, with compute capacity, GPU clusters, and hyperscale cloud platforms being critical for AI growth [1][2] - Nebius Group N.V. (NBIS) and Alphabet Inc. (GOOGL) are two companies attracting investor interest for different reasons, with Nebius focusing on AI-first infrastructure and Alphabet leveraging its scale and proprietary technology [1][2] Nebius Group N.V. (NBIS) - Nebius operates in a supply-constrained AI infrastructure market, with demand for GPU capacity significantly exceeding available resources [3] - The company aims to expand its infrastructure to 2.5 gigawatts of contracted power by 2026, up from an earlier projection of 1 gigawatt, with major contracts secured from Meta ($3 billion) and Microsoft ($17.4–$19.4 billion) [3][4] - Nebius is launching new enterprise offerings, including the Aether 3.0 cloud platform and Nebius Token Factory, and plans to expand data centers in the U.K., Israel, New Jersey, and new sites in the U.S. and Europe [4] - The company targets $7–$9 billion in annual recurring revenue (ARR) for 2026, with expectations of $900 million to $1.1 billion by the end of 2025 [4] - However, Nebius faces macroeconomic challenges, rising operating costs, and increased capital expenditure projections from $2 billion to $5 billion for 2025, which could impact revenue growth [5][6] Alphabet Inc. (GOOGL) - Alphabet has established itself as a leading AI infrastructure provider, focusing on custom hardware and cloud-scale data centers, with Google Cloud revenues increasing by 33.5% year over year in Q3 2025 [7][8] - The company is expanding its cloud footprint through strategic partnerships, including collaboration with NVIDIA, and is introducing advanced AI technologies like Gemini and new GPU offerings [9][10] - Alphabet's initiatives in Generative AI and enhancements in search capabilities are expected to drive advertising revenue growth [10][11] - Despite strong growth, Alphabet's capital expenditures are projected to rise significantly, with estimates for 2025 between $91 billion and $93 billion, raising concerns about margin strain [12] Price Performance and Valuation - Over the past month, NBIS shares have decreased by 24.3%, while GOOGL stock has increased by 16.6% [13] - Valuation analysis indicates that Alphabet appears undervalued with a Value Score of B, whereas Nebius is considered overvalued with a Value Score of F [14] - In terms of Price/Sales ratio, NBIS is trading at 65.15 compared to GOOGL's 10.13, indicating a significant disparity in valuation metrics [15] Earnings Estimates - Analysts have revised earnings estimates downward for NBIS, while GOOGL has seen significant upward revisions [16][19] - Current earnings estimates for NBIS show a downward trend, with substantial negative revisions over the past 60 days [19] Investment Ranking - Currently, NBIS holds a Zacks Rank of 4 (Sell), while GOOGL has a Zacks Rank of 3 (Hold), suggesting that GOOGL may be a more favorable investment option at this time [20]

Core Insights - Robust demand for AI data-center capacity is expected to drive significant growth for Nebius in the upcoming months [1] - Nebius Group presents a compelling investment opportunity due to its focus on AI-optimized computing capacity, contrasting with major hyperscalers [4][5] Company Overview - Nebius is building data center capacity specifically for AI training and inference workloads, utilizing Nvidia GPUs and an AI-optimized software stack [5] - The company rents its computing capacity to various clients, including AI start-ups and tech giants like Meta Platforms and Microsoft [6] Financial Performance - In Q3, Nebius reported a 355% year-over-year revenue increase to $146 million, with its core AI infrastructure business growing 400% [9] - The annualized revenue run rate for its core infrastructure business reached $551 million by the end of Q3 [10] - Adjusted margin for the core infrastructure business was 19%, reflecting strong profitability despite aggressive investments [11] Major Contracts - Nebius has secured a $17.4 billion, five-year deal with Microsoft, potentially expanding to $19.4 billion with additional service capacity [12] - A $3 billion deal with Meta Platforms is also in place, with plans to deploy necessary data center capacity by the end of 2025 [13] - These contracts could significantly impact Nebius' future share prices, given its market capitalization of nearly $22.3 billion [14] Capacity Expansion Plans - Nebius aims to increase its electrical power under contract to 2.5 gigawatts by the end of 2026, with a focus on expanding its data center footprint in the U.S. and internationally [15] - The company has raised its 2025 capital expenditure guidance from $2 billion to $5 billion, allocating significant resources to data center construction and GPU deployment [16][17] Software Development - Nebius has enhanced its AI-optimized software stack with the launch of Aether, providing security and administrative tools for enterprises [18] - The introduction of Nebius Token Factory aims to facilitate the deployment of open-source models at scale, improving customer retention [19] Growth Projections - Nebius projects an annual revenue run rate of $900 million to $1.1 billion by the end of 2025, and $7 billion to $9 billion by the end of 2026, indicating substantial growth potential [21]

Core Insights - CoreWeave, Inc. (CRWV) is positioned to benefit from increasing enterprise adoption driven by demand in cloud, AI, and data-centric workloads, with a tripling of clients generating over $100 million in annual revenue [1][8] Company Developments - A global partnership between CrowdStrike (CRWD) and CoreWeave was announced to create a secure AI cloud foundation, integrating CRWV's AI Cloud with CrowdStrike's security platform [2] - CoreWeave is expanding into the public sector with the launch of CoreWeave Federal, already utilized by NASA for advanced scientific work, enhancing the company's enterprise readiness [3][8] Financial Outlook - CoreWeave has revised its 2025 revenue expectations to $5.05–$5.15 billion, down from $5.15–$5.35 billion, and adjusted operating income to $690–$720 million, below the previous range of $800–$830 million due to supply chain delays [4][8] Competitive Landscape - CoreWeave faces competition from major tech companies like Microsoft (MSFT) and emerging players like Nebius Group N.V. (NBIS), both of which are also experiencing supply constraints amid high demand for AI services [5][6][7] Market Performance - CoreWeave's shares have increased by 93.4% over the past year, significantly outperforming the Internet Software industry's growth of 10% [10] - The company's shares are trading at a Price/Book ratio of 9.75X, higher than the industry average of 5.46X [12]

Core Insights - Nebius Group N.V. (NBIS) experienced a significant decline in share price following its third-quarter 2025 results, with shares down 20.4% since the earnings report on November 7, 2025 [1][8] - The company's stock has dropped approximately 30% over the past month, underperforming the Zacks Internet Software Services industry's decline of 8.8% [2] Financial Performance - In Q3 2025, Nebius reported an adjusted net loss of $100.4 million, which is 153% wider than the loss of $39.7 million from the previous year [4] - Revenues surged 355% year over year to $146.1 million, with the core infrastructure segment growing 400% [4] - Adjusted EBITDA loss was $5.2 million, an improvement from the $45.9 million loss in the prior-year quarter [5] - Total operating costs increased by 145% to $276.3 million, with a net loss from operations of $119.6 million compared to a loss of $43.6 million a year ago [5] Operational Challenges - Nebius faces macroeconomic uncertainties, rising expenses, and heavy capital spending, with capital expenditure guidance raised from approximately $2 billion to around $5 billion for 2025 [6][8] - Structural operational challenges include difficulties in securing sufficient power and ongoing supply-chain constraints, which limit the company's ability to serve customers effectively [9] - The company has tightened its full-year revenue outlook to a range of $500 million to $550 million, down from previous guidance of $450 million to $630 million [10] Competitive Landscape - Nebius is competing with major players like Microsoft, Amazon, and CoreWeave, which are rapidly expanding their AI infrastructure [11][12][13] - The company is consistently "sold out" of capacity, risking lost business and delayed onboarding until new capacity comes online in late 2025 and 2026 [9] Long-Term Growth Potential - Despite near-term challenges, Nebius is committed to strengthening its core AI cloud business, with significant multi-billion-dollar agreements with Microsoft and Meta expected to contribute to revenue starting late in the current quarter [19] - The company plans to scale its data centers in various regions and aims for 2.5 GW of contracted power by 2026 [20] - Nebius is also enhancing its enterprise portfolio with new offerings, targeting an annual run-rate revenue of $900 million to $1.1 billion by the end of 2025 [21]

Core Insights - Nebius Group N.V. (NBIS) aims to achieve an annualized run rate (ARR) of $7–$9 billion by the end of 2026, with a target of $900 million to $1.1 billion by the end of 2025 [1][2] - The company is strengthening its core AI cloud business through partnerships with AI-native startups and major technology players like Microsoft and Meta, with expected revenue contributions ramping up through 2026 [2][4] Business Expansion - Nebius plans to expand its data centers in the U.K., Israel, and New Jersey, while launching new facilities in the U.S. and Europe in the first half of 2026, targeting 2.5 gigawatts of contracted power by 2026, up from 1 gigawatt [3] - The company is enhancing its enterprise offerings with the launch of the Aether 3.0 cloud platform and Nebius Token Factory, positioning itself as a leader in the global AI cloud market [4] Financial Outlook - Nebius has raised its capital expenditure guidance for 2025 from approximately $2 billion to around $5 billion, which may impact growth if revenue does not keep pace [5] - The company has tightened its full-year revenue outlook to a range of $500 million to $550 million, down from previous guidance [6] Competitive Landscape - Microsoft is significantly increasing its AI capacity and expanding its data center footprint, with expectations of total revenues between $79.5 billion and $80.6 billion for the second quarter of fiscal 2026, indicating a growth of 14% to 16% [7] - CoreWeave, Inc. is also expanding its role in the AI cloud market, securing major deals and partnerships, including a multi-year deal with Meta worth up to $14.2 billion [8][9] Market Performance - Shares of Nebius have gained 147.6% in the past six months, outperforming the Internet – Software and Services industry's growth of 9% [11] - The current price/book ratio for NBIS is 5.53X, higher than the industry's 4.26X [12]

Financial Data and Key Metrics Changes - Q3 group revenue reached $146 million, representing a year-over-year increase of nearly 355% and a quarter-over-quarter increase of 39% [7] - Annualized run rate revenue for the core business at the end of September was $551 million, with the core infrastructure business growing 400% year-over-year and 40% sequentially [7] - Adjusted EBITDA margin for the core infrastructure business expanded quarter-over-quarter to nearly 19% [7] - The company raised its 2025 CapEx guidance from approximately $2 billion to around $5 billion, reflecting strong demand outlook [10] Business Line Data and Key Metrics Changes - The core infrastructure business accounted for nearly 90% of total revenue, with significant growth attributed to capacity constraints limiting revenue growth [7] - The company sold out all available capacity in Q3, indicating strong demand for its services [2][7] Market Data and Key Metrics Changes - The company signed a major deal with Meta valued at approximately $3 billion over the next five years, following a previous deal with Microsoft valued between $17.4 billion and $19.4 billion [3][12] - The demand environment is described as overwhelming, with a 70% quarter-on-quarter expansion in pipeline generation [22] Company Strategy and Development Direction - The company is focused on building its core AI cloud business while also pursuing large long-term deals to support growth [3][4] - Plans to grow contracted power to 2.5 gigawatts by the end of 2026, up from 1 gigawatt previously discussed [4][10] - The launch of new enterprise-ready cloud platform version 3.0, called Aether, aims to expand the addressable market opportunity [5] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving an annualized run rate revenue of $7 billion to $9 billion by the end of 2026, driven by strong demand and capacity expansion [6][17] - The company remains focused on maintaining healthy margins and a sustainable business model while navigating the AI revolution [42][63] Other Important Information - The company is actively evaluating financing options, including corporate debt, asset-backed financing, and equity, to support aggressive growth plans [8][32] - The company plans to file a prospectus supplement for an at-the-market equity program for up to 25 million Class A shares [8] Q&A Session Summary Question: Can you tell us more about the new Meta deal? - The Meta deal is approximately $3 billion, limited by available capacity, indicating potential for larger deals if capacity were available [12][13] Question: What is included in the $7 billion-$9 billion ARR target? - The target includes contracted power and demand from AI startups and enterprises, with more than half already booked [15][17] Question: What is the timeline for infrastructure build-out? - The company is ramping up capacity in various regions, with new data centers expected to come online in 2026 [18][19] Question: How will the Microsoft and Meta deals impact revenue? - Revenue from Microsoft will ramp up in 2026, while Meta's deployments are expected to conclude in the next three months [21] Question: What does the demand environment look like? - Demand is accelerating, with a 70% increase in pipeline generation in Q3 [22] Question: What are the constraints to growing capacity? - The main bottleneck is securing power and supply chain issues, which the company is actively addressing [38] Question: How is the enterprise initiative progressing? - The company is making strides in becoming enterprise-ready, with new functionalities and compliance certifications [48][49] Question: What is the opportunity around the Token Factory? - The Token Factory aims to serve a broader set of customers, enabling enterprises to build AI applications at scale [50][52]

Financial Data and Key Metrics Changes - Q3 group revenue reached $146 million, representing a year-over-year increase of nearly 355% and a quarter-over-quarter increase of 39% [7] - Annualized run rate revenue for the core business at the end of September was $551 million, with the core infrastructure business growing 400% year-over-year and 40% sequentially [7][9] - Adjusted EBITDA margin for the core infrastructure business expanded to nearly 19% quarter-over-quarter [7] Business Line Data and Key Metrics Changes - The core infrastructure business accounted for nearly 90% of total revenue, with significant growth attributed to capacity constraints limiting revenue growth [7][9] - The company sold out all available capacity in Q3, indicating strong demand and a bottleneck in revenue growth due to capacity limitations [2][4] Market Data and Key Metrics Changes - The company signed a major deal with Meta valued at approximately $3 billion over the next five years, following a previous deal with Microsoft valued between $17.4 billion and $19.4 billion [3][12] - The demand environment is characterized by overwhelming interest in capacity, with a 70% quarter-on-quarter expansion in pipeline generation [22] Company Strategy and Development Direction - The company is focused on building its core AI cloud business while also pursuing large long-term deals to support growth [3][4] - Plans to grow contracted power to 2.5 gigawatts by the end of 2026, up from 1 gigawatt previously discussed, with significant investments in capacity and infrastructure [4][10] - The launch of new enterprise-ready cloud platform version 3.0, called Aether, and the inference platform Nebius Token Factory aims to expand the addressable market [5][6] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving an annualized run rate revenue of $7 billion to $9 billion by the end of 2026, driven by strong demand and capacity growth [6][17] - The company remains focused on maintaining healthy margins and a sustainable business model while navigating the rapid growth in the AI sector [42][63] Other Important Information - The company is raising its 2025 CapEx guidance from approximately $2 billion to around $5 billion to support aggressive growth plans [10] - The company is actively evaluating financing options, including corporate debt, asset-backed financing, and equity, to support its growth strategy [8][32] Q&A Session Summary Question: Can you tell us more about the new Meta deal? - The Meta deal is approximately $3 billion, limited by available capacity, indicating strong demand for larger contracts [12][13] Question: What is included in the $7 billion-$9 billion ARR target? - The target includes contracted power and existing capacity, with more than half already booked [15][17] Question: What is the timeline for infrastructure build-out? - The company is ramping up capacity in various regions, with new data centers expected to come online in 2026 [18][19] Question: How will Microsoft and Meta revenue contribute in 2025? - Microsoft revenue will ramp up in 2026, while Meta is expected to reach full revenue run rate in 2026 [21] Question: What does the demand environment look like? - Demand is accelerating, with a 70% increase in pipeline generation in Q3 [22] Question: Why is incremental ARR down? - Incremental ARR decreased due to capacity constraints, but is expected to increase significantly in Q4 [24] Question: How is the U.K. facility progressing? - The U.K. facility is progressing well, with strong demand leading to pre-sold capacity [35][36] Question: What is the company's approach to financing? - The company is focused on maintaining a disciplined capital structure while exploring various financing options [32][34] Question: How is the enterprise initiative ramping up? - The company is making strides in becoming enterprise-ready with new product launches and compliance certifications [48]

Financial Data and Key Metrics Changes - Q3 group revenue reached $146 million, representing a year-over-year increase of nearly 355% and a quarter-over-quarter increase of 39% [9] - Annualized run rate revenue for the core business at the end of September was $551 million, with the core infrastructure business accounting for nearly 90% of total revenue and growing 400% year-over-year [9] - Adjusted EBITDA margin for the core infrastructure business expanded quarter-over-quarter to nearly 19% [9] Business Line Data and Key Metrics Changes - The core infrastructure business was the primary driver of revenue growth, with significant contributions from mega deals with Microsoft and Meta [4][9] - The company sold out all available capacity, indicating that revenue growth was limited only by the capacity brought online [9] Market Data and Key Metrics Changes - The demand environment in Q3 was described as very strong, with a 70% quarter-on-quarter expansion in pipeline generation [24] - The company expects to achieve a contracted power of 2.5 gigawatts by the end of 2026, up from 1 gigawatt discussed in the previous earnings call [5][11] Company Strategy and Development Direction - The company is focused on building its core AI cloud business while also pursuing large long-term deals with major clients [4][6] - Investments are being made to secure critical infrastructure, including hardware and power, with a CapEx guidance increase from approximately $2 billion to around $5 billion for 2025 [12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving an annualized run rate revenue of $7 billion to $9 billion by the end of 2026, driven by strong demand and accelerated capacity growth [6][19] - The company remains focused on maintaining healthy margins and a sustainable business model while navigating the rapidly growing AI market [44] Other Important Information - The company launched its new enterprise-ready cloud platform version 3.0, called Aether, and a new inference platform called Nebius Token Factory, aimed at expanding its addressable market [6] - The company is actively evaluating financing options, including corporate debt, asset-backed financing, and equity, to support its growth plans [10][34] Q&A Session Summary Question: Can you tell us more about the new Meta deal? - The new deal with Meta is approximately $3 billion, limited by the capacity available. The company is optimistic about signing more large deals in the future [14] Question: What exactly is in the $7 billion-$9 billion ARR target? - The target includes contracted power and demand from AI startups and enterprises, with more than half already booked [17][19] Question: What gives you confidence that you can reach your 2.5 gigawatts goal of contracted capacity? - The company is ramping up capacity in various regions, including the U.K. and Israel, and has secured a roadmap for 2.5 gigawatts of power [20][21] Question: How should we think about revenue contribution from Microsoft and Meta deals for this year and going forward? - Revenue from Microsoft will ramp up in 2026, while Meta's deployments are expected to conclude in the next three months, with full revenue run rate anticipated in 2026 [22] Question: What does the overall demand environment look like in Q4 and into the next year? - The demand profile is accelerating, with a significant increase in pipeline generation and strong confidence in future growth [24] Question: How are you thinking about CapEx and what is your philosophy on CapEx spending? - The company plans to secure as much capacity as possible, with a focus on building infrastructure in line with visible demand [27][29] Question: Is there any chance that GPUs are oversupplied in the coming year? - The company believes the market will remain supply constrained at least until 2026, with a conservative approach to capital spending [65]