Nebius Group N.V.

Key Reasons for Buy

• Revenue Growth and Market Expansion: Nebius Group reported a substantial increase in financial performance during Q2 FY2025, achieving revenue of USD 105.1 million, marking a 625% year-over-year (YoY) and 106% quarter-over-quarter (QoQ) rise. This acceleration was primarily driven by robust customer demand and near-peak utilization of its AI infrastructure platform. The company’s core AI infrastructure business accounted for the majority of this growth, with its annualized run-rate revenue rising to USD 430 million from USD 249 million in the prior quarter. This performance underscores Nebius’ growing dominance in the AI infrastructure market and its ability to monetize expanding AI use cases globally.
• Operational Efficiency and Profitability Improvement: The company demonstrated significant operational leverage, as reflected in the reduction of costs relative to revenue. Cost of revenue rose by 291% to USD 30.1 million, yet decreased as a share of total revenue from 53% in Q2 FY2024 to 29% in Q2 FY2025, highlighting efficiency gains from scale. Moreover, Nebius’ adjusted EBITDA loss narrowed to USD 21.0 million, representing a 64% improvement YoY, driven by profitability in the core AI infrastructure business. The improvement of USD 37.1 million indicates disciplined execution and operating leverage as revenues scaled.
• Investment in Capacity and Technological Leadership: Nebius continued to invest heavily in capacity expansion, with capital expenditures reaching USD 510.6 million in Q2 FY2025, primarily allocated to GPU acquisitions and data center development. The company aims to achieve 220 MW of connected power by end-2025 and more than 1 GW by end-2026. These investments are central to supporting the growing global demand for AI compute. Additionally, Nebius achieved top-tier MLPerf® Training v5.0 benchmark results, ranking among the leaders in infrastructure performance and scalability, further solidifying its position as a preferred AI cloud provider.
• Diversification of Customer Base and Ecosystem Development: During the quarter, Nebius diversified its customer portfolio by adding global technology leaders such as Cloudflare, Prosus, and Shopify, alongside numerous AI-native startups like HeyGen, Lightning.AI, and Photoroom. The company’s platform enhancements—such as Managed Slurm, improved cluster reliability, and high-throughput storage solutions—bolstered user experience. Moreover, collaborations with NVIDIA, AnyScale, LightningAI, and BaseTen deepened its ecosystem, enhancing developer accessibility and reinforcing Nebius’ ecosystem-first growth strategy.
• Expansion of Other Business Units: Beyond its AI infrastructure segment, Nebius’ subsidiary TripleTen delivered strong revenue growth, adding around 6,000 new learners in Q2 and benefiting from AI-enhanced learning tools that improved project completion rates by 35%. Avride, its autonomous delivery arm, scaled pilot operations across U.S. and Japanese cities, progressing toward a commercial launch with Uber later in 2025. These adjacent ventures, though smaller in contribution, position Nebius for diversified revenue streams in high-growth AI and automation markets.
• Cost Structure and Operating Discipline: Despite rising investments, Nebius demonstrated meaningful improvement in cost discipline. Product development expenses, though up 34% YoY to USD 42.8 million, fell sharply as a percentage of revenue from 221% to 41%, reflecting operating scale efficiencies. Sales, general, and administrative (SG&A) expenses declined 10% YoY to USD 68.2 million, dropping from 521% to 65% of revenue due to the absence of one-time legal and consulting costs from the prior year. These metrics collectively underline Nebius’ maturing cost management as it scales globally.
• Balance Sheet Strength and Strategic Outlook: Nebius ended Q2 FY2025 with USD 1.68 billion in cash, providing ample liquidity to fund its aggressive expansion strategy. The company has raised over USD 4 billion in total capital and continues to explore additional financing options to support its growth trajectory. With its valuation at USD 6 billion following a recent funding round and a raised annualized run-rate revenue forecast to USD 900 million–USD 1.1 billion, Nebius is well-positioned to capitalize on accelerating demand for AI infrastructure. The management anticipates continued growth, backed by scale, ecosystem partnerships, and operational efficiency.

Nebius Group delivered exceptional performance in Q2 FY2025, showcasing strong execution and accelerating momentum across its AI infrastructure business. Revenue surged 625% year-over-year to USD 105.1 million, supported by robust customer demand and near-peak platform utilization, while adjusted EBITDA loss narrowed significantly by USD 37 million, reflecting improved operational efficiency. Backed by USD 1.68 billion in cash and over USD 4 billion in secured capital, Nebius continues to scale aggressively, expanding global data center capacity toward 1 GW by 2026. The company’s growing enterprise clientele, ecosystem partnerships with NVIDIA and leading AI developers, and leadership in performance benchmarks reinforce its position as a frontrunner in next-generation AI infrastructure, providing a compelling growth story underpinned by strong fundamentals and strategic clarity..

As per the above-mentioned price action, recent key business and financial updates, momentum in the stock over the last month, and technical indicators analysis, a ‘Buy’ rating has been given to Nebius Group NV, (NASDAQ: NBIS) at the current market price of USD 97.16 as of Oct 22,2025 at 9:25 am PDT.