Since the close of trading last week, shares of the artificial intelligence (AI) cloud company Nebius Group (NBIS 1.68%) had risen 16%, as of 10:18 a.m. ET today. The company has purchased new land that could signal expansion, and one of its competitors also just signed a major deal earlier this week.
Still plenty of fuel behind AI infrastructure
There's a lot of debate among investors regarding what inning of AI infrastructure buildout we are in. While no one knows for sure, there still appears to be a strong appetite for AI data centers. Earlier this week, CoreWeave, a competitor of Nebius, signed a new multiyear, $14 billion deal to provide capacity to Meta Platforms.
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While Nebius and CoreWeave compete, many of the hyperscalers use more than one AI data center, provider and if demand for AI infrastructure is still strong, it's good for everyone in the space. Kimberly Forrest, the chief investment officer for Bokeh Capital Partners, said the deal shows that demand for high-quality AI chips is "limitless."
Additionally, this week Nebius purchased 79 acres of land in Birmingham, Alabama, for $90 million that appears to be tied to a previous announcement from the company about U.S. expansion. M.V. Cunha, who runs a substack and a popular account on X and who has nailed bullish calls on Nebius, believes the company could use the newly purchased land to build new data centers with hundreds of megawatts of capacity.
It's not too late
Nebius has been a monster this year, with its stock up about 310%. That said, I think investors can still buy the stock, especially with the huge deal with Microsoft it announced recently. While I do have concerns about an AI slowdown at some point, Nebius still has a strong balance sheet, is likely to reach other big deals with hyperscalers, and also has other businesses like autonomous driving that could be valuable down the line.
