Should Investors Consider Purchasing Nebius Stock Prior to August 7th?
Nebius Projects Robust Growth in AI Infrastructure Market
Nebius, a neocloud provider, is poised for growth in the AI infrastructure landscape, as investors closely watch its progress over the next several years. The company reported an impressive annualized run rate revenue (ARR) of $249 million for its core infrastructure services segment at the end of the first quarter, with a target to hit its full-year 2025 ARR guidance in the range of $750 million and $1 billion.
In Q1 2025, Nebius reported revenue of approximately $55.3 million, with momentum carrying into Q2 as ARR increased from $249 million at the end of Q1 to around $310 million in April. The company's management aims for an annualized run-rate revenue between $750 million and $1 billion by the end of 2025, reflecting a significant growth trajectory compared to prior years.
Nebius is an integral partner to Nvidia's ecosystem, helping roll out its newest Blackwell GPUs worldwide. The company helps outfit data centers with various Nvidia GPU architectures and provides access to this infrastructure via the cloud.
In terms of profitability, Nebius is expected to turn positive on adjusted EBITDA in H2 2025 after reporting an adjusted EBITDA loss of $266.4 million for 2024, an improvement from a $282.8 million loss in 2023. However, full-year 2025 EBITDA is projected to remain negative due to ongoing high growth and capital expenditures, though this is anticipated to improve dramatically in the second half of the year.
Compared to competitors like CoreWeave, Nebius operates at a smaller scale but is growing quickly. CoreWeave reported Q1 2025 revenue of approximately $981.6 million (up 420% year-over-year) and adjusted EBITDA of $606 million with margin improvements to 62%. Nebius' path involves high capital investments to capture AI infrastructure demand while managing profitability challenges. Tech giants like Microsoft and Amazon, who are also massively increasing capital expenditures in AI-related infrastructure, are among Nebius' competitors.
Nebius' shares have risen by 36% since reporting first-quarter earnings on May 1. Investors should assess Nebius' second-quarter earnings report before initiating or adding to their existing position in Nebius stock. The company is scheduled to report earnings for the second calendar quarter of 2025 on Aug. 7.
As of late, Nebius stock has been trading sideways. However, there is still momentum fueling its price action. Tech companies like Alphabet and Meta Platforms have guided toward significant capital expenditure spending in 2025, with Alphabet announcing a $10 billion increase in its infrastructure spend for 2025. This trend is expected to continue, supporting Nebius' growth prospects.
In summary, Nebius projects significant revenue growth and expects to achieve positive adjusted EBITDA in the second half of 2025, though still operating with high costs in the near term. Its growth pace is strong but smaller scale compared to some key competitors, who also face trade-offs between growth and profitability in the AI infrastructure market. Investors with a long-run time horizon should consider dollar-cost averaging strategy, investing in high-conviction positions over several years and at different price points.
- To capitalize on the expanding AI infrastructure market, Nebius may consider investing a significant amount of money in their business, aiming to capture the growing demand for AI infrastructure services.
- As a result of Nebius' robust growth, investors are closely watching the company's progress and assessing if the business's growth trajectory could provide lucrative returns on their investments.
- In order to stay competitive in the AI infrastructure market, companies like Nebius need to keep up with the latest advancements in technology, particularly in the field of business and AI-related infrastructure.
