Is Nebius Group Stock Worth the Risk?

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Ah, Nebius Group-formerly Yandex-where the world of tech and international geopolitics collide in an awkward dance, like a middle-aged man trying to relearn the waltz after a decade of binge-watching reality TV. Once the dominant search engine in Russia, the company found itself in a bit of a jam when sanctions slapped it harder than a parent scolding a child for not cleaning their room. In February of 2022, its Nasdaq-listed shares were suspended. No doubt, the investors felt like the tech equivalent of someone being told they missed the last train home-only it wasn’t the last train, it was a very long ride through international turmoil.

In a desperate (yet entirely predictable) attempt to keep afloat, Nebius-formerly riding high on its Yandex search engine-decided to pivot, shedding its Russian assets like a bad breakup. It rebranded itself as a cloud-based AI infrastructure provider, and voila! The once-sequestered company returned to the Nasdaq in October 2024, like an ex trying to sneak back into a high school reunion. Its stock reopened at $14.29 and shot up to about $110, dazzling investors with promises of AI growth and a shiny new deal with Microsoft. But now, in a market as fickle as my own attempts at making sourdough bread, the question looms: is this stock still worth buying today, or is it yet another mirage in the desert of tech speculation?

What exactly does Nebius do?

Let me tell you, Nebius is essentially a glorified real estate mogul for AI-if you replace real estate with data centers and AI with a collection of very expensive, power-hungry GPUs. This isn’t your average cloud provider; Nebius fully owns a data center in Finland, and it’s leasing space in places like Missouri, France, and Iceland. It’s even building a new data center in New Jersey, which feels like something a Silicon Valley startup would do to seem international without actually leaving the Bay Area. This is a global operation, people.

In these data centers, Nebius installed Nvidia’s H100, H200, and L40S GPUs-basically, the Rolls-Royce of GPUs. These are the engines driving complex AI tasks, which is the kind of jargon that makes you feel slightly inadequate when you realize you don’t even know how to turn on your smart fridge properly. Nebius’s cloud-based service offers companies the luxury of using these pricey GPUs without having to actually buy them. If you’re like me, you’re already picturing a giant AI cloud that’s so vast, it has its own gravitational pull. But, unlike a black hole, Nebius promises not to suck all your cash away (hopefully).

How does it compare to CoreWeave?

Here’s where it gets interesting: Nebius isn’t the only company offering cloud-based GPUs for AI. Enter CoreWeave, a company that might seem like a competitor but, in reality, is more like the cousin who shows up uninvited to your wedding and eats all the cake. CoreWeave operates 33 data centers in the U.S. and Europe, and it’s very much about processing those GPU-intensive workloads. Nebius, on the other hand, wants to be your one-stop-shop for all things AI-combining cloud GPUs with other managed services like Kubernetes and PostgreSQL. This is where Nebius tries to differentiate itself as the more sophisticated player in the game, like the guy at a dinner party who talks about NFTs like he invented them.

In terms of backing, both companies have Nvidia’s blessing. Nvidia owns 0.5% of Nebius and about 6.4% of CoreWeave. It’s the kind of partnership that says, “We’re all in this together,” as long as the AI bubble doesn’t burst anytime soon. And, speaking of bubbles, Nebius recently inked a massive $17.4 billion AI infrastructure deal with Microsoft, while CoreWeave is happily making its own bank with Microsoft and OpenAI. So, it’s clear that both companies are betting on AI being the next big thing, even though I’m not entirely sure if AI is going to be the hero or the villain in this story.

How fast is Nebius growing?

If Nebius’s growth were any faster, it might get an Olympic gold medal for speed. In 2024, its revenue surged by 462% to $117.5 million-an increase that makes you question whether someone accidentally added a zero to their earnings report. Analysts predict a compound annual growth rate (CAGR) of 231% from 2024 to 2027, which sounds suspiciously like a math problem designed to make your eyes glaze over. But here’s the gist: Nebius expects its revenue to reach $4.25 billion by 2027, and it plans to expand its data center capacity from 190 megawatts (MW) to 1 gigawatt (GW) by 2026. That’s a big deal. I mean, it’s the kind of ambition I’d need if I ever planned on running a marathon.

Despite all this promise, Nebius’s adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) are still in the red, with a negative $266.4 million in 2024. But by 2026, analysts predict a positive $852 million in EBITDA. This sounds like the financial equivalent of a plot twist, which, if you ask me, is far too optimistic. But who am I to say? Maybe it’s my own trust issues coming through.

So, is it the right time to buy Nebius’ stock?

Here’s the rub: Nebius, like all tech companies, will need to burn a lot of cash, issue more shares, and take on debt to fuel its ambitious plans. But with the AI market growing faster than a teenager’s shoe size, it’s entirely possible that Nebius will continue to ride this wave of excitement. Personally, though, I’m a skeptic at heart. I can’t help but wonder if all this growth is just a mirage, or if we’re witnessing the birth of the next big thing in AI. My advice? If you’re willing to live with the volatility and potential disappointment, this might be a stock worth adding to your portfolio. Otherwise, you might want to wait until the dust settles-after all, tech stocks have a funny way of imploding when everyone gets too excited.

In the end, only time will tell if Nebius is the next great tech unicorn, or just another AI-inspired fantasy. Until then, I’ll be over here, trying to figure out how to turn my own AI dreams into something more practical-like, say, a robot that does my laundry.

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2025-10-01 11:29