CANADA – 2025/08/08: In this photo illustration, the Nebius Group logo is seen displayed on a smartphone screen. (Photo Illustration by Thomas Fuller/SOPA Images/LightRocket via Getty Images)
SOPA Images/LightRocket via Getty Images
Approximately one year ago, AI-centric cloud company Nebius (NASDAQ: NBIS) was largely dismissed as a leftover from Russian technology. Emerging from a split with Yandex, Russia’s leading internet firm, it appeared destined to remain on the periphery of global technology. Instead, it has orchestrated one of the most impressive comebacks in the sector. Since it began trading last October at $20 per share, Nebius has rallied to $89, elevating its market capitalization to over $21 billion – a 350% increase in just about twelve months. Unlike many “story stocks,” this increase is rooted in fundamentals: revenues are projected to rise from $117 million in 2024 to an anticipated $568 million in 2025 and $1.5 billion in 2026.
Further fueling the momentum, Nebius recently secured a landmark $17.4 billion agreement with Microsoft (NASDAQ:MSFT) to provide GPU infrastructure capacity over the following five years – validating its capabilities. Now, some of the biggest names in technology – Amazon (NASDAQ:AMZN), Microsoft, Alphabet (NASDAQ:GOOG) – have built multi-trillion dollar valuations based on their cloud infrastructure. With AI now serving as the key growth driver in tech, we present an argument for how Nebius can leverage its exclusive AI focus to pave a path towards a valuation exceeding $100 billion in the upcoming years.
The AI Compute Era
Nebius is not a general-purpose cloud like AWS or Azure. It belongs to a new category of “Neoclouds” – infrastructure platforms designed exclusively for AI workloads, with computing, storage, networking, and management tools all optimized for training and operating large-scale AI models. While hyperscalers attempt to cater to everyone, Nebius concentrates on providing exactly what AI labs and organizations require most: high-performance, dedicated GPU infrastructure. The Microsoft agreement reinforces this strategy.
The software giant has repeatedly encountered shortages in AI computing, exacerbated by its obligations to supply OpenAI. To bridge this gap, Microsoft will obtain dedicated capacity from a new Nebius data center in Vineland, New Jersey, starting later this year. From ChatGPT transforming how we operate and conduct research to AlphaFold accelerating drug discovery and generative tools reshaping creative workflows, AI is driving nearly every sector – and Nebius could be powering the essential infrastructure that enables it all.
Before we delve into the specific figures for Nebius stock, let’s recognize a crucial reality. Investing in individual stocks, particularly in high-growth firms like Nebius, carries inherent volatility. While the potential for upside is significant, the journey can be tumultuous. That said, if you’re looking for upside with reduced volatility compared to holding individual stocks, consider the High Quality Portfolio. It has consistently surpassed its benchmark—a combination of the S&P 500, Russell, and S&P MidCap indexes—and has achieved returns greater than 91% since its launch. This diversified strategy can offer exposure to high-quality growth firms while managing the risks associated with individual stocks. Now, with this context in mind, let’s explore what makes Nebius’s unique narrative so compelling.
How Nebius Is Different
Indeed, there is considerable competition in this industry, but Nebius sets itself apart in a few key ways despite the competitive landscape. Firstly, the company maintains a close partnership with AI chip frontrunner Nvidia (NASDAQ: NVDA), which manufactures the most advanced GPUs and essentially establishes industry benchmarks. Nvidia serves as both a significant partner and investor, having participated in a $700 million funding round last year and holds over 1 million Nebius shares. This partnership may provide Nebius preferential access to Nvidia’s most desired GPUs, such as the Blackwell super chips, granting it a vital advantage in a market where supply continues to lag behind demand.
Another key differentiator is Nebius’s vertically integrated model. The company designs its own servers internally, bypassing OEMs and collaborating directly with manufacturers to cut costs, enhance performance, and quickly integrate the latest GPUs. This control accelerates deployment cycles and boosts efficiency — with infrastructure costs reportedly as low as $0.025 per GPU-hour. The company also provides transparent billing and imposes no lock-ins, making it particularly attractive to AI-first startups, where many innovations are taking place. This could help it better secure early customers.
The $100 Billion Math
Let’s assess the scale of the opportunity. Amazon Web Services (AWS) leads with an annual revenue run-rate exceeding $120 billion, while Microsoft’s Azure exceeded $75 billion in the previous fiscal year. AI workloads are even more compute- and memory-intensive, indicating that the AI cloud market may ultimately outstrip the current general-purpose cloud in terms of scale. The AI cloud segment is growing much more rapidly than the general-purpose cloud, as generative and automation use cases proliferate. Moreover, in contrast to hyperscalers, AI-centered clouds deploy specialized GPU clusters, liquid cooling, and tailored orchestration software, allowing for premium pricing, enhanced customer lock-in, and accelerated growth.
The Microsoft agreement validates Nebius’s technology and could create opportunities for further partnerships with hyperscalers or enterprises. The numbers support the bullish perspective: consensus projections indicate revenue will increase from $568 million in 2025 to roughly $1.5 billion in 2026. Extending the trend, if Nebius compounds at 50% annually from 2026 through 2030, revenue could reach approximately $7.6 billion. Notably, the Microsoft contract alone could contribute over $3.5 billion annually by 2028, rendering the $7.6 billion figure possibly conservative.
For context, Nebius currently trades at about 40× the estimated revenue for 2025. Even if this multiple contracts to 15× sales – which is not unusual for high-growth cloud infrastructure – that suggests a market cap of $114 billion. For comparison, Microsoft, valued at over $3.5 trillion, trades at nearly 12x sales, so this multiple should be reasonable for an earlier growth stage company like Nebius. With roughly 250 million shares outstanding, this translates to a stock price of around $459 per share by 2030. That represents an upside of more than 5x from the current stock price of $89.
Risks remain
The bullish case for Nebius is predicated on the flawless execution of its significant Microsoft contract, ongoing preferential access to Nvidia’s most advanced GPUs, and financing rapid expansion without severely impacting its margins. Microsoft will also represent a disproportionate share of future revenue, leaving Nebius highly reliant on a single customer. Additionally, with the stock already trading at nearly 40× FY25 revenue – significantly above peers – any slowdown could adversely affect its valuation. It’s also important to consider Nebius’s background and acknowledge its origins. The company was established as an offshoot of Yandex, Russia’s tech giant, and founder Arkady Volozh faced EU sanctions following the invasion of Ukraine, which made investors apprehensive. Since then, Nebius has fully severed ties with Yandex’s Russian operations and has relocated to Amsterdam with an international engineering team. The EU lifted its sanctions last year, alleviating most of the geopolitical concerns, though the company’s Russian roots remain a small residual risk.
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