Shares of artificial intelligence (AI)-powered cloud infrastructure provider Nebius Group (NBIS +1.68%) are up by over 417% in the past year.
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Besides increasing retail interest, smart money has also been steadily building positions in this stock. Currently, institutional investors control a 21.9% stake in the company. Over the last 12 months, total institutional inflows were approximately $1.56 billion, while outflows totaled $398.49 million. Hence, it is evident that smart money is taking a keen interest in the company's future growth prospects.
Key catalyst
The company is rapidly scaling from a niche cloud provider that rents GPUs to a full-stack infrastructure platform. Nebius also recorded near-peak utilization for its platform in the second quarter, as demand continued to surpass available supply. Hence, any new capacity coming online is expected to sell through fast, thus translating into higher revenue and earnings in the coming quarters.
NASDAQ: NBIS
Key Data Points
Management expects the company's data center capacity to reach 220 megawatts by the end of 2025, with 100 megawatts of active power in New Jersey and Finland data centers. The company has already doubled network speed and made software enhancements to support training and inference of AI models on its platform.
In September 2025, the company entered a $17.4 billion deal to supply GPU compute capacity to Microsoft (MSFT 0.04%) over the next five years. Microsoft may also purchase additional capacity, bringing the deal value to $19.4 billion. This has dramatically improved future revenue visibility for Nebius.
Financials and valuation
Analysts expect Nebius' revenue to grow by roughly 392% year over year to $578.16 million in fiscal 2025 (ending December 2025). Although the company is unlikely to be profitable, analysts are also estimating a significant reduction in losses per share for fiscal 2025.
Nebius trades at an elevated valuation of 114.9 times sales. While expensive, this is not abnormal for an AI company in the early stages of its high-growth trajectory. Hence, it may be worthwhile for retail investors to pick up a small stake in this stock now.
