To The Moon

$NEBIUS(NBIS)$

Artificial intelligence remains the hottest investment theme of the decade, with trillions of dollars expected to be poured into infrastructure, data centers, and GPU capacity over the coming years. At the center of this buildout are not just chipmakers like Nvidia, but also a growing ecosystem of infrastructure providers who deliver the power, facilities, and scalability required to deploy AI at scale.

One of the most striking stories in this space right now is Nebius Group, a relatively young AI infrastructure provider that just reported truly eye-popping results. The company’s revenue soared 625% year-over-year and climbed 106% sequentially, while also reaching EBITDA profitability in its core AI segment earlier than expected.

For investors, this raises a pressing question: is Nebius Group shaping up to be one of the next breakout AI infrastructure stocks, or is this a high-risk play that’s still too early to touch?

Explosive Growth That Can’t Be Ignored

Nebius isn’t growing at a modest double-digit rate. It isn’t even growing at the kind of 50–100% annual growth we sometimes see with emerging SaaS firms. Instead, it’s putting up numbers that are almost unheard of for a company at this scale.

• Year-over-year revenue growth: +625%

• Quarter-over-quarter revenue growth: +106%

• Profitability milestone: EBITDA positive in AI infrastructure segment, ahead of forecasts

For a business in its early stages, these achievements indicate strong demand, execution, and a market environment that continues to support hypergrowth. Importantly, Nebius didn’t achieve this at the expense of future growth — management made it clear that demand still exceeds supply and that the company is scaling to catch up.

Why Early Profitability Matters

One of the subtler but important developments in Nebius’s latest update is profitability. Becoming EBITDA positive in the AI infrastructure segment isn’t just a financial metric — it signals that the business model works.

This is particularly critical for younger companies in high-capex industries. Turning profitable earlier than expected shows that management’s forecasts were conservative and execution has been stronger than modeled. It also provides a financial cushion that allows for reinvestment in scaling operations without constant reliance on outside capital.

I view this as a very different situation than with mature companies who deliberately “sandbag” expectations just to beat them each quarter. For Nebius, this is about beating internal operational milestones, not simply managing Wall Street guidance.

The Nvidia Connection: Supply Constraints and Blackwell Architecture

A key dynamic in Nebius’s business model is its reliance on Nvidia’s GPU supply. Like many peers, Nebius was oversold on its previous-generation GPUs and is now waiting for Nvidia’s Blackwell architecture, the next step in AI chip performance.

This ties directly into Nvidia’s new strategy of releasing new architectures every year rather than every two. Each generation acts as a forcing function for enterprises to upgrade infrastructure, creating a built-in catalyst for demand across the supply chain.

For Nebius, securing and deploying the Blackwell GPUs will be crucial for maintaining growth momentum. Until then, supply remains a bottleneck — but it’s a bottleneck the entire industry is experiencing, not just Nebius.

Demand Tailwinds: Hundreds of Billions in Play

The demand environment for AI infrastructure is almost unprecedented. Nvidia has estimated that enterprises will spend around $600 billion in 2025 alone building out AI-optimized data centers — nearly double the level from just a few years ago. Over the long term, this spend could scale into multiple trillions as generative AI adoption accelerates.

Nebius is well-positioned to benefit from this wave. In fact, the company raised its annual recurring revenue (ARR) guidance substantially:

• Previous guidance: $700 million to $1.0 billion

• New guidance: $900 million to $1.1 billion

At the midpoint, that’s a more than 15% upward revision in just a single quarter — a clear sign that management sees accelerating demand from customers.

Building Out Infrastructure: Power Is the New Bottleneck

Securing GPU supply is only one part of the challenge. The other, often overlooked, is power. AI-optimized data centers consume several times more electricity than traditional CPU-based facilities.

Nebius reported that it has secured 220 megawatts of connected power capacity, either already active or ready for GPU deployment. This includes its data centers in New Jersey and Finland, which position the company in both North American and European markets.

This is more than just a technical detail. Securing power involves navigating regulatory approvals, local governments, and utility negotiations. Companies that move quickly to lock in power capacity will have a competitive advantage as demand ramps.

How Nebius Stacks Up Against Competitors

The AI infrastructure market is crowded, with players ranging from cloud hyperscalers (AWS, Google Cloud, Microsoft Azure) to independent colocation and infrastructure firms. What differentiates Nebius is its laser focus on GPU-optimized AI data centers and its willingness to scale aggressively in response to customer demand.

Unlike hyperscalers, Nebius is not trying to own the entire AI stack from chips to software. Instead, it is positioning itself as a specialized infrastructure partner, which could allow it to scale faster and serve a wider set of enterprise customers without being tied to a single ecosystem.

The Risk Side of the Equation

While the growth story is compelling, investors need to weigh the risks:

1. Reliance on Nvidia supply chain – Any delays in Blackwell shipments or shortages could slow Nebius’s deployment pace.

2. Capital intensity – Building GPU-optimized data centers is extraordinarily expensive. Maintaining profitability while scaling capex will be a delicate balance.

3. Competition from hyperscalers – Amazon, Google, and Microsoft are investing heavily in their own AI infrastructure. While demand is currently strong enough for multiple players, hyperscaler dominance could limit Nebius’s long-term margins.

4. Regulatory hurdles around power and energy use – Governments may impose new restrictions or costs on AI data center energy consumption, which could impact scalability.

Investment Verdict: Hold, With an Eye on an Upgrade

After analyzing Nebius’s latest results and guidance, I recently issued my first rating on the company. For now, I’m maintaining a Hold rating.

This isn’t because Nebius is underperforming — in fact, it’s performing exceptionally well. Instead, it’s because the company is still in hypergrowth mode, with risks around supply, capital intensity, and execution. It’s difficult to assign a stable valuation until more visibility emerges.

That said, Nebius looks much closer to a Buy than a Sell. The combination of early profitability, hypergrowth, rising guidance, and favorable market tailwinds make this one of the most interesting high-risk, high-reward AI plays on the market today. I wouldn’t be surprised if my next update leans toward an upgrade.

Key Takeaways for Investors

1. Nebius Group is growing at an extraordinary pace, with revenue up 625% year-over-year and more than doubling sequentially.

2. Profitability arrived earlier than expected, showing that the business model is already viable.

3. Demand continues to outpace supply, with Nebius waiting for Nvidia’s Blackwell GPUs to deploy in its data centers.

4. The AI infrastructure market is booming, with $600 billion expected to be spent this year alone on data centers.

5. Power capacity is the new bottleneck, and Nebius has secured 220MW to stay ahead of demand.

6. The stock remains high-risk, high-reward, making it a Hold for now — but with upside potential as visibility improves.

Final Thoughts

The AI infrastructure buildout is one of the defining investment themes of this decade. Nebius Group has emerged as a serious contender, showing both explosive growth and early profitability in an environment where demand appears insatiable.

For risk-tolerant investors, Nebius is a stock to watch closely. While I’m not ready to call it a Buy just yet, the story is developing quickly — and if management continues to execute at this level, Nebius could easily become one of the standout winners in the AI arms race.