Nebius Group NV (NBIS) Company Overview

Nebius Group's shares have increased by more than 100% in the last year, thanks to its innovative AI-native cloud platform and affordable services for small and medium-sized businesses as well as AI startups. The company's varied ecosystem, which includes subsidiaries like Toloka AI and Avride, adds to its appeal and allows for cross-selling in various AI sectors. Additionally, its strategic growth into new regions and a solid partnership with NVIDIA strengthen Nebius's competitive position, providing access to advanced hardware and addressing rising computational needs.

In the past week, the financial sector finally found a topic to discuss besides Nvidia.

I think that many investment firms in the US are not paying much attention to Nebius stock right now. There is very little analysis on the company, even though it has great potential. I expect that as Nebius sets up more customer hubs and GPU clusters in the US in the next year or two, more institutional investors will take notice, especially since the company has nearly $3 billion in cash, support from NVIDIA, and a $1 billion plan for data center expansion.

DeepSeek's effectiveness has caused a drop in AI stock prices, but I think the market is being too harsh on Nebius Group. Even though DeepSeek has reduced training costs, the AI data center market will still experience a major shortage, which will help Nebius AI in the future. There are three possible situations: the market growth could slow down, speed up, or DeepSeek's costs might be higher than they say, and in all these cases, Nebius AI stands to gain.

On Monday, shares of Nebius Group (NASDAQ: NBIS) dropped sharply by almost 40% after the announcement of DeepSeek's new AI model. This news triggered panic selling in the AI and semiconductor sectors, and NBIS was one of the hardest hit.

Nebius is ready to take advantage of the growing trend in AI, using its special engineering skills and support from Nvidia, which makes it a promising investment. The recent drop in share price by 37% may have led to more institutional investors buying in, which could help stabilize Nebius's stock and lessen price fluctuations. Additionally, DeepSeek's improvements will lower AI costs, boosting the need for computing power and supporting the growth of Nebius's data centers.

Nebius Group N.V. is a great investment opportunity, recovering from a 40% decline and ready to take advantage of the AI boom, even after the DeepSeek selloff. The company provides comprehensive AI solutions with excellent performance and holds important investments in AI-related sectors, which boosts its value. The financial future looks bright, with expected AI revenues reaching $700 million by 2025 and a solid cash position without any debt.

In my last article on Nebius Group, I estimated its value to be $8.8 billion, which is $37.5 for each share. In this piece, I took a close look at the robotaxi market in the U.S. and evaluated Avride's potential in that market to find its fair value. My findings suggest that Avride could rank 2nd or 3rd in the U.S. robotaxi market.

Nebius has great potential for growth, as it experienced a 766% rise in revenue in the third quarter of 2024, mainly due to its AI infrastructure sector. Although it is not currently making a profit, Nebius has $2.28 billion in cash and very little debt, which provides it with the funds needed for expansion. The company plans to invest heavily in AI infrastructure in Europe and North America, including new GPU clusters in locations like Paris, Finland, and Texas.