AI Stocks in 2025
As tech titans such as Nvidia and Palantir Technologies dominate headlines within the burgeoning artificial intelligence (AI) sector, a relatively diminutive entity has quietly eclipsed both competitors in 2025, demonstrating remarkable growth.
Nebius Group Stock Soars 136% in 2025, Surpassing Nvidia and Palantir
Nebius Group (NASDAQ: NBIS), a Dutch company specializing in AI-enhanced data centers, has witnessed its stock price surge by an astounding 136% this year, according to reports. This performance significantly outstrips Nvidia’s modest 24% increase and Palantir’s impressive 102% rise, positioning Nebius as one of the foremost AI equities presently available in the market, as noted by The Motley Fool.
How Nebius Fuels AI Expansion Through Cloud Infrastructure
Nebius operates within the rapidly evolving cloud infrastructure-as-a-service (IaaS) sphere. It furnishes a scalable cloud computing platform powered by Nvidia GPUs, which clients can utilize to execute AI workloads, as highlighted by The Motley Fool. Additionally, the firm offers a platform called AI Studio, granting users access to various large language models (LLMs) for developing AI applications and executing inference across its data center network.
Driven by escalating demand for these services, Nebius experienced an astronomical revenue escalation of 545% during the first half of 2025, culminating in $156 million, per The Motley Fool’s findings.
During its August earnings discourse, the company disclosed that it had completely sold out its capacity utilizing Nvidia’s prior generation Hopper GPUs and has commenced offering the latest Nvidia Blackwell systems via its data centers.
Nebius Accelerates Data Center Capacity Expansion
In response to burgeoning demand, Nebius is expeditiously augmenting its data center capabilities. The company anticipates reaching 220 megawatts (MW) of connected capacity by year-end to deploy additional GPUs. Looking further ahead, Nebius projects achieving over 1 gigawatt (GW) of contracted capacity by the conclusion of 2026.
This scale of expansion is paramount. In the realm of cloud AI infrastructure, the potential for revenue is intrinsically linked to the extent of data center capacity a company can furnish, as observed by The Motley Fool.
Nebius Revises Revenue Projections for 2025
Owing to this remarkable upward trend, Nebius has adjusted its annualized run-rate revenue (ARR) forecast to a midpoint of $1 billion for 2025, a notable increase from its previous estimation of $875 million. ARR is derived from multiplying the revenue for the last month of a quarter by 12, as detailed in the report.
Software and Services Enhance Nebius’ Profit Margins
Despite soaring revenues, Nebius has managed to keep its losses proportionally limited. In the preceding quarter, its adjusted net loss increased by a mere 38% year-over-year, a substantial contrast to its rapid revenue growth, according to The Motley Fool’s analysis. This trend suggests the company is progressing closer to potential profitability.
A significant contributor to its robust performance is the impressive margins generated from its software and services, as reported by The Motley Fool.
CFO Elaborates on GPU Pricing and Investment Returns
During the earnings call, CFO Dado Alonso articulated the company’s pricing strategy, stating, “When we price our GPUs, we aim for healthy margins on a per-hour compute basis.” He elaborated that for the Hopper generation, the company anticipates achieving break-even status within approximately two to three years at the gross profit level, factoring in both hardware costs and operational expenses.
Alonso further added that this assessment does not account for the higher-margin software and services revenue, which, as they scale, could expedite the return on invested capital, as quoted by The Motley Fool.
Is Nebius the Next Major AI Stock?
Although Nebius has yet to attain the brand recognition of Nvidia or Palantir, its stellar results in 2025 have undoubtedly captured the attention of investors. With surging demand, a well-defined growth strategy, and enhanced margins, it is poised to challenge some of the most prominent names within the industry.
FAQs
Why has Nebius stock surged by 136% in 2025?
The stock’s ascension can be attributed to a staggering 545% increase in revenue, heightened demand for its AI infrastructure, and an expansion of data center capacity.
How does Nebius measure up against Nvidia and Palantir?
In 2025, Nebius has outperformed both competitors, with Nvidia posting a 24% increase and Palantir a 102% rise, relative to Nebius’ remarkable 136% growth.
Source link: M.economictimes.com.
