I'm convinced that the best way to play the growth of artificial intelligence is not to invest in various software companies, but to look for companies building the infrastructure that makes AI a reality. There's a lot from which to choose in this space, including chipmakers, foundries, and even companies that make the equipment needed to build and operate massive data centers.
That's why one of my favorite stocks is Nebius Group (NBIS +5.49%). The Dutch company is building data centers specifically designed to power AI technology, using thousands of Nvidia graphics processing units to operate a full-stack AI cloud platform -- providing its customers with everything they need to build, train, deploy, and run AI workloads.
Nebius Group stock is up 190% in the past yea, and the company's revenue is jumping rapidly. Despite the run-up in stock price, Nebius has plenty of runway left, and it's my bet as the ultimate growth stock for any investor with $1,000 to invest.
Image source: Getty Images.
A look at Nebius stock
Any discussion of this stock needs to begin with how it got here. Nebius used to trade on the Nasdaq under the name Yandex, and its primary business was a Russian internet company of the same name. But after Moscow invaded Ukraine and Russian companies were hit with sanctions, the Nasdaq suspended trading in Yandex and began the delisting process.
Before the delisting could be completed, however, Yandex sold off its Russian assets and rebranded as Nebius, a cloud infrastructure company. Shares resumed trading in 2024.
Now, Nebius is an important part of the AI infrastructure puzzle, instead of a Wall Street pariah. It has partnerships with some of the biggest AI companies on the planet. Those include a five-year, $19.4 billion agreement with Microsoft to provide dedicated GPU capacity for Microsoft Azure, and a $3 billion deal to provide computing power to Meta Platforms, which is rapidly expanding its AI capacity to train and run its Llama large language model.
NASDAQ: NBIS
Key Data Points
How fast is Nebius growing?
Nebius Group's third-quarter earnings showed how quickly the company has grown in a relatively short period. Revenue of $146.1 million was up 355% from a year ago. The company's scaling fast but not turning a profit yet -- the adjusted net loss in the third quarter was $100.4 million, versus a net loss of $39.7 million a year ago. But that's to be expected when the company is aggressively scaling up. Management said that it sold out of all available capacity in the quarter, and in fact, the deal with Meta Platforms would have been bigger if Nebius had the available capacity to offer.
Nebius was projected to have 220 megawatts of connected power for its data centers by the end of 2025, and to increase that to a range of 800 megawatts to 1 gigawatt by the end of 2026. It has not yet reported 2025 results.
"Given the progress we've made to date, we are confident in our business strategy, operations, and overall market demand," CEO Arkady Volozh said. "The only real limitation on our revenue growth in 2025 has been the amount of capacity that we have been able to bring online. In the last few months, we have worked very hard to unlock this bottleneck, and we will continue doing so in 2026."
The company is projecting $900 million to $1.1 billion in annualized run rate revenue when it reports full-year 2025 earnings, likely in early February, and expects that to increase to $7 billion to $9 billion by the end of 2026.
Nebius Group is a buy for 2026
Building data centers is an expensive business, but it's also highly lucrative right now -- the only thing that is holding Nebius back from greater sales and more contracts is its ability to scale up. But Nebius is on track to greatly expand its capacity this year, and it continues to raise billions to acquire GPUs, land, and related infrastructure. The company reported $4.8 billion in hand at the end of the third quarter in cash and cash equivalents, giving it the resources it needs to expand.
Nebius Group is one of my favorite AI infrastructure stocks. I'm looking for it to sign several new deals this year. And when it does, the stock will reward its longtime investors.
