Nebius Group N.V. (NBIS) Stock Soars on Explosive Growth, Analysts See Multibagger Potential
NEW YORK, NY – November 15, 2024 – Nebius Group N.V. (NBIS) continues to demonstrate rapid growth in the AI infrastructure space, prompting analysts to revisit bullish theses despite capital intensity and competitive pressures. The company’s stock has appreciated approximately 224% since April 2024, fueled by strong execution and increasing investor confidence.
Nebius’s business model centers on a cycle of superior infrastructure performance driving revenue growth, which then supports margin expansion and reinvestment in research & development and verticalization. Recent data indicates improving gross margins compared to competitor Coreweave,though a durable advantage remains to be established.
Revenues surged to $105.1 million in the latest quarter, a 625% year-over-year increase, with a current run-rate revenue of $430 million – tripling Coreweave’s growth rate. However, operating profit and free cash flow are currently pressured by substantial capital expenditures related to GPU scaling and depreciation; $510 million was spent on these in Q2 alone.
Management has raised its Annual Recurring Revenue (ARR) guidance to $900 million-$1.1 billion by year-end and plans to expand capacity to 220 MW this year, with a target exceeding 1 GW by 2026. Key enterprise wins include Shopify,Prosus,and Cloudflare,alongside traction with AI-native startups.
Analysts at MMMT Wealth previously outlined a bullish thesis on Nebius in April 2024, highlighting GPU deployment plans and perceived undervaluation. Lorenzo Bastianelli shares a similar optimistic outlook, emphasizing the importance of monitoring margins, cash burn, and competitive dynamics.
While acknowledging risks related to cash burn and competition from hyperscalers, analysts believe Nebius offers leveraged exposure to the AI infrastructure cycle with significant optionality.Even achieving 80% of guided growth over the next 12 months would leave the stock attractively valued, with potential for a multibagger outcome if Nebius sustains its current momentum.
As of the end of the first quarter, 51 hedge fund portfolios held NBIS, down from 66 in the previous quarter. Nebius is not currently included on Insider Monkey’s list of the 30 Most Popular Stocks Among Hedge Funds.
