Excitement for artificial intelligence (AI) stocks led everything from semiconductor stocks to software stocks higher in 2025. Neocloud stock Nebius Group (NBIS 1.67%) is no different. Shares of Nebius soared 85% since the start of the year as of this writing.
The market, however, is forward-looking, and is less concerned with the past than with what's coming down the road. And, according to management, investors can expect notable growth in the coming months.
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Sales growth isn't the only positive that management projects for 2025
AI tools such as generative AI and deep learning are transforming multiple industries, but developing these tools means little if the data center infrastructure isn't in place to support it. That's where Nebius comes in. As a neocloud provider, the company developed a next-generation cloud platform specifically designed for the intensive computing loads that AI and machine learning require.
Nebius reported robust year-over-year revenue growth of 462% in 2024, illustrating the allure of the company's offerings to AI customers. The increase in sales is impressive -- but maybe not so surprising considering the massive capital expenditures AI companies are making in data center investments. The company also progressed with respect to profitability. In 2024, Nebius reported an adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) loss of $266.4 million, a narrower loss than the negative $282.8 million in adjusted EBITDA that it reported in 2023.
Management projects that revenue and adjusted EBITDA growth will extend through the remainder of the year. It also projects 2025 sales of $500 million to $700 million, and forecasts that the company will achieve positive adjusted EBITDA in the second half of the year. Should the company report at the midpoint for revenue, this means that it will have achieved 411% top-line growth.
Revenue growth through the first couple of months and forecast for the end of 2025
For investors keen to see signs of Nebius' continued growth, management's revenue and adjusted EBITDA forecast for 2025 is certainly encouraging. Even more encouraging, however, is the company's expectation that it will achieve annualized run-rate revenue of $750 million to $1 billion by the end of 2025.
For perspective on how significant the achievement of this forecast would be, consider that Nebius had an annualized run-rate revenue of $249 million as of March 31, 2025.
During its first-quarter 2025 conference call, management discussed several accomplishments that investors can infer are the basis for the annualized run-rate revenue forecast. In addition to adding new data center capacity in Iceland, New Jersey, and Kansas City, Missouri, Nebius plans on expanding operations in Finland.
The company is likely basing its annualized run-rate revenue growth on increased demand from customers following the ongoing deployments of Nvidia's H200, Blackwell, and Grace Blackwell (GB200) graphics processing unit (GPU) generations, and with the planned deployments of Blackwell Ultra occurring in the third quarter.
Should investors click the buy button on Nebius stock now?
With the AI industry booming and Nebius finding itself in high demand, growth investors are wise to keep this stock on their radars. While Nebius is still unprofitable, there's a higher degree of risk associated with an investment -- especially since the company's rollouts of both new data center capacity and the Blackwell Ultra platform are hardly guaranteed. Those looking to reduce their risk exposure may find an AI-focused exchange-traded fund to be a more alluring option.
