Key Points

• Nebius and CoreWeave have been in red-hot form on the stock market this year thanks to the terrific demand for their cloud infrastructure solutions.

• Both companies seem to be able to sustain their impressive growth in the long run, thanks to the lucrative AI-related market that they are serving.

• 10 stocks we like better than CoreWeave ›

CoreWeave (NASDAQ: CRWV) and Nebius Group (NASDAQ: NBIS) have witnessed a rapid jump in their share prices this year. Investors have been buying these stocks hand over fist because they are benefiting big time from the growing demand for cloud-based artificial intelligence (AI) infrastructure.

CoreWeave stock has shot up a remarkable 224% in just four months since going public in March this year, and Nebius has clocked healthy gains of 84% so far in 2025. Both companies are in the business of renting out data centers powered by graphics processing units (GPUs), which their customers use to train AI models, build applications, and scale up those applications in the cloud.

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But if you have to choose one of these two stocks for your portfolio right now, which one should it be? Let's find out.

The case for CoreWeave

CoreWeave's rally since its initial public offering (IPO) can be attributed to the terrific growth in the company's revenue and backlog. Its top line jumped by more than fivefold in the first quarter to $981 million, and it's on track to sustain its outstanding momentum.

That's because the cloud infrastructure-as-a-service market in which CoreWeave operates is growing at an incredible pace. Grand View Research estimates that the cloud AI market could generate $650 billion in annual revenue in 2030, nearly 7.5 times the size of this market last year. CoreWeave is capitalizing on this lucrative opportunity by offering access to the top-of-the-line GPUs from Nvidia along with server processors from AMD.

The company claims that customers using its cloud AI infrastructure enjoy significant cost and performance advantages. It says its infrastructure is "purpose-built for compute-intensive workloads, and everything from our servers to our storage and networking solutions are designed to deliver best-in-class performance."

The demand for the company's AI infrastructure is outpacing supply, so it is focused on scaling up its capacity quickly to satisfy the strong demand. Management said on its May earnings conference call that it has raised over $21 billion to expand infrastructure and data center capacity.

The company recently announced the upcoming $9 billion acquisition of Core Scientific, which could bring another 1 gigawatt (GW) of data center capacity and help lower its costs from its existing leases with Core Scientific.

CoreWeave forecasts a reduction of over $10 billion in future lease liabilities once the acquisition is complete, followed by annual run-rate cost savings of $500 million by the end of 2027. Before this acquisition was announced, CoreWeave was projecting a fourfold increase in its data center capacity under its existing capacity contracts.

This focus on enhancing data center capacity should pave the way for outstanding growth for CoreWeave since it was sitting on a revenue backlog of almost $26 billion at the end of the first quarter -- 63% higher from the year-ago period. As such, analysts are expecting its revenue to continue increasing at a strong pace.

CRWV Revenue Estimates for Current Fiscal Year; data by YCharts.

CoreWeave is likely to remain a top AI stock since it is serving a fast-growing market and is investing aggressively to capture a share of it.

The case for Nebius

Nebius shot up impressively last week after Goldman Sachs put a 12-month price target of $68 on the stock. The investment bank said that the company's full-stack AI infrastructure, which includes hardware and software tools, allows it to make the most of the impressive opportunity in this space.

Goldman's price target calls for a 31% jump in the stock in the coming year. And there is a good chance that the company could surpass that given its 385% revenue jump year over year in the first quarter to $55 million. More importantly, the growth in its annual revenue run rate was much faster at 684% year over year to $249 million.

That improved to $310 million in April, and the company forecasts an annual revenue run rate of $750 million to $1 billion by the end of the year, driven by the new data center capacity it is planning. In a letter to shareholders, CEO Arkady Volozh said:

We are rapidly expanding our capacity footprint. In just three quarters, we've gone from one location in Finland to five locations across Europe, the U.S., and now the Middle East. We are actively exploring new sites in the U.S. and around the world, and we expect to provide more news on this soon.

Unlike CoreWeave, Nebius provides more than just AI hardware infrastructure to customers. Its cloud platform also offers developer tools and services that customers can employ to refine their AI models, run inference tasks, and develop custom solutions. This is why Goldman believes that Nebius could be a leader in the cloud AI space.

The company's balance sheet -- with $1.45 billion in cash and $188 million in debt -- allows it to continue putting more money into its cloud infrastructure. This explains the healthy top-line growth it is projected to deliver.

NBIS Revenue Estimates for Current Fiscal Year; data by YCharts.

So, like CoreWeave, Nebius is likely to remain a high-growth company. But is it a better buy than its larger peer at this point?

The verdict

Both CoreWeave and Nebius are growing at healthy rates and are expected to sustain that. So, investors should look at their valuations to decide which is the better buy.

The two companies aren't profitable right now considering their aggressive infrastructure investments, so we need to compare their price-to-sales ratios (P/S).

NBIS PS Ratio (Forward); data by YCharts.

Nebius stock is way more expensive than CoreWeave when comparing sales multiples, indicating that the latter is a better buy even after its strong rally this year. Moreover, CoreWeave is growing faster, has a huge backlog, and is sitting on ample resources to continue expanding its data center footprint, making it the easy choice for investors considering which of these two AI stocks is worth adding to their portfolios right now.

Should you invest $1,000 in CoreWeave right now?

Before you buy stock in CoreWeave, consider this:

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Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $636,628!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,063,471!*

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Key Points

• Nvidia has ownership stakes in "neocloud" companies Nebius Group and CoreWeave.

• While each company is positioned to benefit from investments in AI infrastructure, CoreWeave's growth prospects appear more robust over the long term.

• Wall Street is forecasting CoreWeave's revenue to triple over the next couple of years, which should help pave a path to profitability.

• 10 stocks we like better than CoreWeave ›

Following the end of each quarter, financial services firms that manage over $100 million in stocks are required to file a form 13F with the Securities and Exchange Commission (SEC). These filings represent an itemized breakdown of all the stocks that the fund bought and sold during the most recent quarter.

While investors may not realize it, corporations can also invest their cash into equity positions of other businesses. According to Nvidia's recent 13F filing, the semiconductor darling currently holds positions across six stocks. Two of its holdings are spread between artificial intelligence (AI) data center stocks, Nebius Group and CoreWeave (NASDAQ: CRWV).

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Fresh off a hot initial public offering (IPO) earlier this year, CoreWeave has emerged as an integral player in the AI infrastructure market. Let's dive into CoreWeave's business and explore how the company is transforming the AI landscape.

What does CoreWeave do?

For the last few years, investors have learned about the important role that advanced chipsets known as graphics processing units (GPUs) play in the development of generative AI. The GPU market is largely dominated by Nvidia and Advanced Micro Devices, both of which are able to command hefty price tags for their coveted data center hardware.

While AI has served as an unprecedented tailwind for the chip market, one of the subtle nuances is that this demand has brought a series of complications to supply and demand dynamics.

This is where CoreWeave comes into play. CoreWeave operates as a "neocloud," which is a specialized type of business that allows companies to access GPU architecture through cloud-based infrastructure. This flexible model appeals to businesses that may not be able to purchase GPUs directly from Nvidia or its cohorts due to rising price dynamics.

By offering an agile and potentially more affordable model than cloud hyperscalers such as Microsoft Azure, Amazon Web Services, and Google Cloud Platform, CoreWeave has been able to attract a number of high-profile customers and ink a series of multiyear, billion-dollar deals.

What does CoreWeave's growth look like?

For the quarter ended March 31, CoreWeave generated $982 million in revenue -- up 420% year over year. While the company's net loss widened more than twofold compared to the year-ago quarter, CoreWeave has some catalysts that should quickly turn around the dynamics of its profitability profile. See estimates in the chart below.

CRWV Revenue Estimates for Current Fiscal Year data by YCharts

During the earnings call, management raised guidance for both revenue and capital expenditures (capex). While more spending may stifle profitability in the short term, these investments are necessary foundations for the longer-term opportunity in AI infrastructure.

As Wall Street's estimates pictured in the chart above showcase, CoreWeave's investments today should help secure more access to Nvidia's Blackwell GPU architecture and should ultimately serve as a tailwind for more accelerated growth down the road.

Is CoreWeave stock a buy right now?

In the chart below, I compare CoreWeave to Oracle on a price-to-sales (P/S) basis. Oracle is also a leading player in infrastructure-as-a-service (IaaS), having just signed a $30 billion cloud deal of its own, so it's comparable to CoreWeave. That single deal is expected to bring in nearly twice the amount of CoreWeave's total 2027 revenue. And yet, investors are placing a twofold premium on CoreWeave's P/S multiple when compared to Oracle.

CRWV PS Ratio data by YCharts

I think there are a couple of nuances to point out when it comes to CoreWeave's valuation relative to a peer such as Oracle.

First, Oracle is experiencing a transition period -- effectively replacing slow-growth (or no-growth) segments of the business with its new, budding data center infrastructure operation. For this reason, investors are likely applying a discount to Oracle relative to a high-growth AI stock such as CoreWeave.

Moreover, CoreWeave completed an IPO earlier this year. Since then, the company has inked an $11.2 billion deal with OpenAI, announced the planned acquisition of Core Scientific to bolster its platform, and earned a spot in some of Wall Street's most respected institutional portfolios.

This confluence of factors is more than enough to garner outsize excitement and enthusiasm from investors. For these reasons, I'm not surprised to see CoreWeave trading at such a premium.

I think the most prudent course of action for investors is to buy CoreWeave stock at different price points over a long-term time horizon. If you invest the same amount of money at set time intervals, that is known as dollar-cost averaging, and can help mitigate risk by removing specific timing and price points from the equation.

Overall, I see CoreWeave as a compelling opportunity that is well positioned to dominate the infrastructure chapter of the AI narrative. If I could buy only one Nvidia-backed data center stock, CoreWeave would be it.

Should you invest $1,000 in CoreWeave right now?

Before you buy stock in CoreWeave, consider this:

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Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $636,628!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,063,471!*

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Adam Spatacco has positions in Amazon, Microsoft, and Nvidia. The Motley Fool has positions in and recommends Advanced Micro Devices, Amazon, Microsoft, and Nvidia. The Motley Fool recommends Nebius Group and recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.

Key Points

• Anticipated deregulation and advancements in artificial intelligence have pushed valuations sky-high, but select opportunities remain.

• Nebius Group's 385% year-over-year revenue growth and path to $1 billion in annual recurring revenue make today's premium valuation tomorrow's bargain.

• Rocket Lab's evolution from launch provider to full-stack space company justifies its premium valuation.

• These 10 stocks could mint the next wave of millionaires ›

Growth stocks have made a strong comeback after a rocky start to the year, driven by anticipated deregulation and significant breakthroughs in artificial intelligence (AI). Valuations have surged, and at first glance, bargains seem extinct.

Look closer. Two high-powered growth stocks buck this trend, offering compelling opportunities despite price tags that would terrify traditional investors.

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When 70 times sales is cheap

Nebius Group (NASDAQ: NBIS) trades at over 70 times trailing sales, an astronomical valuation by any measure. Why is this valuation deceptive in light of its AI tailwinds? Because the company is growing so fast that backward-looking metrics become meaningless.

The company posted 385% year-over-year revenue growth in Q1 2025. Annual recurring revenue hit $310 million in April, and management guides to $750 million to $1 billion by year's end. When revenue triples in 12 months, that multiple of 70 times trailing sales effectively collapses to under 25 times on forward estimates -- before factoring in the next wave of AI infrastructure demand. The window to act closes fast.

Nebius builds physical clusters of graphics processing units (GPUs) for enterprises desperate for AI compute power. Its Kansas City facility will house 35,000 Nvidia GPUs when complete, one of the largest deployments outside Amazon or Microsoft.

Nebius's enterprise customers span from autonomous vehicle developers to large language model startups, all battling for scarce GPU access as AI adoption accelerates. Nebius's compute clusters power everything from next-generation autonomous driving algorithms to cutting-edge generative AI platforms, making it indispensable to industries chasing exponential AI growth. With $1.44 billion in cash and manageable debt from recent convertible notes, the company can fund this massive expansion.

Nvidia's direct investment speaks volumes. When the world's dominant AI chip maker backs your infrastructure buildout, it validates the technology and strategy. Early access to Blackwell chips gives Nebius pricing advantages that competitors can't match. Jeff Bezos doubled down through Bezos Expeditions' investment in Nebius's Toloka AI subsidiary.

With first-mover scale, privileged access to Blackwell chips, and $2.4 billion in total funding, including recent convertible notes, Nebius has carved out a widening moat in the AI compute arms race, one that's hard for new entrants to replicate without billions in upfront capital.

A space race winner

Humanity is going to the stars. That much is certain. Rocket Lab (NASDAQ: RKLB) trades at 41 times trailing sales, but this valuation misses the transformation under way.

Q1 2025 revenue hit $123 million, up 32% year over year, with more coming from spacecraft components than launches. Today, over 50% of Rocket Lab's revenue comes from spacecraft systems, not launches, a diversification that boosts margins and stabilizes growth.

This shift to higher-margin, recurring revenue from spacecraft components fundamentally changes the investment thesis from a pure-play launch company to a diversified space infrastructure provider.

At the start of the year, Rocket Lab was selected as one of five providers for the U.S. Space Force's $5.6 billion National Security Space Launch Phase 3 Lane 1 program, positioning the company to compete for high-priority defense missions. The company also participates in multiple billion-dollar defense frameworks, including the Department of Defense's MACH-TB hypersonic testing program.

These selections validate Rocket Lab's technology while providing multiyear revenue opportunities. With satellite demand far outstripping global launch capacity, Rocket Lab's position as a trusted provider -- and one of the few with access to major defense frameworks -- gives it pricing power, resilience, and a clear runway for growth.

Why premium prices make sense here

These valuations look expensive because the market applies traditional metrics to revolutionary businesses. AI infrastructure and space commercialization represent generational shifts with economics that break conventional models.

Nebius benefits from AI compute demand doubling every six months. Rocket Lab rides satellite launches projected to increase fivefold by 2030. Both companies execute against opportunities larger than their current valuations suggest.

The real risk isn't paying premium prices for companies growing at triple-digit rates. It's watching from the sidelines as others capture the upside of tomorrow's giants. For investors willing to think beyond outdated valuation fears, Nebius Group and Rocket Lab offer rare asymmetric opportunities in industries poised for exponential growth.

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John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. George Budwell has positions in Microsoft, Nvidia, and Rocket Lab. The Motley Fool has positions in and recommends Amazon, Microsoft, Nvidia, and Rocket Lab. The Motley Fool recommends Nebius Group and recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.

Key Points

• Nebius rallied over 50% in June, on top of a 62% rally in May.

• Neoclouds have been soaring in the past couple of months, as optimism over AI grows again.

• One analyst said he liked Nebius' stock more than a high-profile competitor's, sending Nebius soaring.

Shares of artificial intelligence (AI) neocloud Nebius Group (NASDAQ: NBIS) rocketed 50.6% in June, according to data from S&P Global Market Intelligence.

Neoclouds and other AI-related stocks had great months in June in general, as the sector not only recovered from the April "Liberation Day" plunge, but also saw continued bullish data and statements from major tech CEOs on the growth of AI.

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In addition, one analyst wrote a note comparing Nebius to one of its main neocloud rivals, CoreWeave (NASDAQ: CRWV), preferring Nebius over its better-known competitor.

Arete gives Nebius the thumbs-up

On June 5, analyst Andrew Beale of boutique sell-side analyst firm Arete Research published a note, giving Nebius a "Buy" rating, with an $84 price target. In contrast, the analyst gave CoreWeave a "Neutral" rating. Beale concludes that both stocks will trade according to how short of graphics processing unit (GPU) supply the world is at the moment, but that he preferred Nebius due to its lower "embedded valuation" relative to CoreWeave.

Nebius actually trades at a higher valuation than CoreWeave based on this year's revenue estimates, with CoreWeave trading at about 14.5 times this year's revenue estimates of $5 billion. On the other hand, Nebius trades around 22 times 2025 revenue estimates of $526 million. However, Nebius has lots of net cash on its balance sheet of about $1.44 billion, while CoreWeave has about $6.2 billion in net debt. Nebius is also much earlier in its growth trajectory.

Nebius is unique

Like CoreWeave, Nebius is backed by Nvidia (NASDAQ: NVDA), which participated in an oversubscribed private placement in Nebius in December. Like CoreWeave, Nebius may have all the same advantages, including a preferred GPU allocation over other cloud providers, due to Nvidia's investment. However, both stocks also have the disadvantage of being highly dependent on Nvidia and Nvidia's competitive position in the industry.

Nebius differentiates itself by building its own data center server infrastructure, whereas CoreWeave tends to buy servers from others, and opts to differentiate itself through its in-house software and middleware.

It's hard to say at this point which is the better pick, given how similar their positioning is and how early we are in the AI infrastructure build-out. However, if one believes in an Nvidia-dominated AI future and that AI spending will continue to grow by leaps and bounds, both Nebius and CoreWeave are worth consideration.

Should you invest $1,000 in Nebius Group right now?

Before you buy stock in Nebius Group, consider this:

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Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $692,914!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $963,866!*

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The investing community is beginning to take notice of Nebius Group (NASDAQ: NBIS). I say that largely based on the almost 150% surge in its share price since mid-April. There's a reason behind that, though. Nebius has been executing on its plan to grow its revenues to a level that would justify a valuation well above its current one.

The company, which went public in May 2011 under the name Yandex, was originally a Russian search engine company. The stock peaked in late 2021. It now trades as Amsterdam-based Nebius Group more than 40% off that previous high.

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Nebius sprouted as the cloud computing arm of Russian e-services giant Yandex. It was formed after Yandex restructured and divested all of its Russian assets in July 2024. It resumed trading on the Nasdaq Stock Exchange under the Nebius name in late October 2024.

Nvidia believes in Nebius

The stock remains far below its Yandex-era highs since the post-transition business has yet to fully demonstrate its potential for growing revenue. But Nebius management is giving investors a good idea of how to value that expected growth. If its assessment proves accurate, Nebius stock would be a good buy at recent prices.

Nebius' core business is cloud infrastructure. It's one of a growing number of hyperscalers supplying the computing power needed in the age of artificial intelligence (AI).

Hyperscalers like Nebius have the massive amounts of data center infrastructure that it takes to supply cloud computing services on a global level. It competes with leading players like Amazon Web Services (AWS), Microsoft Azure, and Alphabet's Google Cloud.

While its cloud infrastructure and services segment is Nebius' core business, the company has four business segments, all in specific areas of the AI ecosystem:

• Nebius (cloud infrastructure): The core business, providing infrastructure from a network of data centers for AI workloads, including large-scale GPU clusters, cloud platforms, and developer tools.

• Toloka: A data partner with a network of human specialists to test and evaluate large language models (LLMs) in generative AI development.

• TripleTen: A technology platform focused on reskilling individuals for tech careers, leveraging AI-driven educational tools.

• Avride: Developing autonomous driving technology for self-driving cars and delivery robots, targeting sectors like ride-hailing, logistics, e-commerce, and food delivery.

Nebius' work in the AI ecosystem has attracted the attention of AI leader Nvidia. The chipmaker participated in a $700 million private funding round for Nebius late last year. Nvidia also owns more than 1 million shares of Nebius stock.

Why Nebius shares could keep rising

Nebius is leading the way in providing computing capacity from Nvidia's GB200 Blackwell Superchips to European customers. The GB200 is a key component in the architecture of Nvidia CPU and GPU liquid-cooled server racks, including networking links for AI model inference.

Nebius' partnership with Nvidia gives the cloud services company the ability to scale at a rate that management says will result in an annualized revenue run rate of between $750 million and $1 billion by the end of 2025. It also expects to reach positive adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) this year.

The upper end of that revenue run rate would give Nebius a price-to-sales (P/S) ratio of about 12.5, even after the stock's recent surge. That appears to be a reasonable valuation for such a fast-growing tech company. By comparison, fellow cloud AI infrastructure provider CoreWeave sports a P/S ratio of about 15 based on this year's revenue guidance.

Nebius may now be showing up on some tech investors' radars, but it still isn't being valued as richly as it could be. If Nebius does achieve the sales growth management says it's on track to reach this year, the stock could have more room to run over both the short and long term.

Should you invest $1,000 in Nebius Group right now?

Before you buy stock in Nebius Group, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Nebius Group wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $713,547!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $966,931!*

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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Howard Smith has positions in Alphabet, Amazon, Microsoft, Nebius Group, and Nvidia. The Motley Fool has positions in and recommends Alphabet, Amazon, Microsoft, and Nvidia. The Motley Fool recommends Nasdaq and Nebius Group and recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.

When it comes to investing in artificial intelligence (AI) stocks, some of the most common opportunities reside in software platforms and semiconductors. But one pocket of the AI realm that is steadily starting to gain some traction is infrastructure.

Think of it this way: When cloud hyperscalers such as Amazon, Microsoft, or Alphabet each say they are spending tens of billions of dollars on AI capital expenditures (capex), only some of this spend is allocated toward chipsets and network equipment supplied by the likes of Nvidia, Advanced Micro Devices, or Broadcom.

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In the background, there are companies that are actually building the data centers and graphics processing unit (GPU) clusters in which they reside. This is where Nebius Group (NASDAQ: NBIS) comes into play.

Let's explore what Nebius does and how the company is riding the tailwinds of rising AI infrastructure investment. Could Nebius be an under-the-radar opportunity for growth investors right now?

What does Nebius do?

Nebius operates across four segments. The company's core business is an infrastructure-as-a-service (IaaS) business -- essentially offering customers the ability to access high-performance compute architecture via the cloud.

In addition, Nebius has three subsidiaries: Avride, Toloka, and TripleTen. Avride is an emerging force in the autonomous vehicle industry, and recently struck a partnership with global car manufacturer Hyundai. Toloka serves as a data partner for large language models (LLMs) and AI developers including Anthropic, Microsoft, and Shopify. TripleTen is a software platform marketed toward the education industry, which is another budding area where AI could lead to some transformative changes.

AI infrastructure is booming

While Nebius is a diversified business and positioned to benefit from AI in many different ways, most investors tend to focus on the company's infrastructure segment. The company works closely with Nvidia, allowing its customers to access a series of different GPU architectures.

At the end of the first quarter, Nebius' IaaS business was operating at a $249 million annual recurring revenue (ARR) run rate. While this might not seem like much at first, consider this: Management is guiding toward an ARR run rate between $750 million and $1 billion by year-end, as well as positive adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA).

How is Nebius going to increase its core infrastructure segment by nearly fourfold over the next six months?

For starters, the company's data center footprint is expanding rapidly. In addition to existing projects in France and Finland, the company is also building out new infrastructure in Iceland, Kansas City, and New Jersey.

Moreover, these new data centers will be equipped with the most in-demand GPUs on the market -- of course, I'm talking about Nvidia Blackwell, Grace Blackwell, and Blackwell Ultra architectures.

When you consider that major hyperscalers are on pace to spend more than $300 billion on AI capex just this year, coupled with industry forecasts calling for $6.7 trillion of infrastructure spend by next decade, Nebius appears to have strong secular tailwinds fueling its long-run growth narrative.

Is Nebius stock a good buy right now?

When it comes to investing in Nebius, valuation is a little bit challenging, given the company's corporate history. Toward the end of 2024, Nebius was actually spun out of a Russian internet conglomerate called Yandex. As part of the deal structure, Nebius become an independent entity and listed on the Nasdaq exchange.

Given the limited financial picture available to investors, I don't find traditional valuation metrics such as price-to-sales (P/S) or other ratios entirely helpful when looking at Nebius. Rather, I'd like to look at the company relative to some peers.

NBIS Market Cap data by YCharts

One of the closest comparable public companies to Nebius is AI cloud infrastructure provider CoreWeave, which went public earlier this year. As the graph makes clear, not only does CoreWeave boast a much larger market capitalization than Nebius, but its value is actually expanding.

Granted, there are reasons for this. CoreWeave is a much larger company than Nebius on the sales front, and the company continues to strike lucrative partnerships with AI's biggest developers.

But even so, it's hard to deny CoreWeave's valuation momentum right now compared to the mundane price action in Nebius. To me, Nebius is flying under the radar -- completely overshadowed by CoreWeave's popularity.

I see robust growth ahead for Nebius both in the short and long run, and I think the company's relationships with Nvidia and others in the AI landscape could lead to larger, more strategic deals over time.

For these reasons, I would encourage investors looking for new growth opportunities in the AI space to consider a position in the infrastructure services pocket -- and particularly in Nebius.

Should you invest $1,000 in Nebius Group right now?

Before you buy stock in Nebius Group, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Nebius Group wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $669,517!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $868,615!*

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Since last Friday, shares of the artificial intelligence (AI) data center company Nebius Group (NASDAQ: NBIS) had soared roughly 29%, as of 11:57 a.m. ET Thursday. The company successfully raised capital this week and received more positive sentiment from Wall Street.

Becoming a serious AI name

On Monday, Nebius announced that it had successfully raised $1 billion through two different tranches of unsecured convertible notes. Half is in the form of 2% convertible notes due 2029, while the other half is 3% convertible notes due 2031.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Learn More »

Nebius' founder and CEO Arkady Volozh said in a statement:

Since our $700 million equity financing in December 2024, we have been scaling rapidly and expanding our global AI infrastructure footprint. The fresh capital we are raising now gives us more firepower to go faster, paving the way for increased revenue opportunities in 2026 and further accelerating us toward our medium-term target of mid-single-digit billions of dollars in revenue as a high-margin business, with potential upside.

This morning, Arete Securities analyst Andrew Beale initiated coverage of Nebius with a buy rating and $84 price target, implying significant upside from current levels. Beale also said he prefers Nebius to another larger and similar company, CoreWeave, due to Nebius' more attractive valuation. While CoreWeave is more of a pure play on AI, Beale thinks Nebius' neo-cloud valuation is too low.

Still affordable in AI land

Nebius and CoreWeave are essentially in the business of running data centers for customers looking to build and run AI applications on, so if the AI industry continues to thrive, these two companies stand to benefit.

While I believe in AI's potential, I usually stay away from most AI stocks because of extremely high valuations. Nebius, however, actually came to the market last year at a very affordable valuation. The company had been delisted from the Nasdaq for close to three years due to being a Russian-owned company, although this is no longer the case.

After the stock's big run, the company trades at close to an $11 billion market cap, so it's more expensive than it once was. However, if management can hit its mid-single-digit billions revenue guidance over the next few years, the stock won't look expensive at today's value.

Should you invest $1,000 in Nebius Group right now?

Before you buy stock in Nebius Group, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Nebius Group wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $668,538!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $869,841!*

Now, it’s worth noting Stock Advisor’s total average return is 789% — a market-crushing outperformance compared to 172% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of June 2, 2025

Bram Berkowitz has positions in Nebius Group. The Motley Fool has positions in and recommends Nebius Group. The Motley Fool has a disclosure policy.

Shares of artificial intelligence (AI) cloud service provider Nebius Group (NASDAQ: NBIS) are surging today. The stock jumped after one independent equity research firm began coverage on the stock with a very bullish outlook.

Nebius stock was trading higher by 19.5% as of 11:05 a.m. ET.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Learn More »

A growth story that's just beginning

London-based Arete Research analyst Andrew Beale began coverage of the stock with a "buy" rating and a price target that seems to have taken investors by surprise. Reports say Beale set $84 as his price target, which represents a 113% increase over Wednesday's closing price.

The analyst sees that significant upside after the Netherlands-based Nebius recently reported first-quarter revenue growth of 385%. That was off a low base versus last year, but the company sees continued expansion at an accelerated rate.

Beale's optimism stems from the nearly 700% increase in Nebius' annualized revenue run rate. Management expects to at least triple that annualized level of revenue by the fourth quarter of this year. Its AI cloud capabilities are in high demand, and Nebius reports a strong $1.44 billion cash position as of March 31.

That cash will be needed for the continued investment in cloud infrastructure to continue to scale the business. Nebius also announced a $1 billion capital raise on June 2 from the sale of convertible notes.

Nebius also has a partnership with AI leader Nvidia, offering the new Blackwell Ultra AI factory platform to businesses looking "to build the next generation of agentic, reasoning, and physical AI."

Investors still need to consider the risks. In addition to its capital spending needs, Nebius seeks to achieve a goal of positive adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) later this year. That's one key metric investors should continue to monitor. That would instill more confidence in the stock and the company's ability to continue to achieve its high growth trajectory.

Should you invest $1,000 in Nebius Group right now?

Before you buy stock in Nebius Group, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Nebius Group wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $668,538!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $869,841!*

Now, it’s worth noting Stock Advisor’s total average return is 789% — a market-crushing outperformance compared to 172% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of June 2, 2025

Howard Smith has positions in Nebius Group and Nvidia. The Motley Fool has positions in and recommends Nebius Group and Nvidia. The Motley Fool has a disclosure policy.