Nebius Group: AI's Infrastructure Giant

Published Date : 31/07/2025 

Nebius Group, a data center company backed by Nvidia, is rapidly gaining traction in the AI infrastructure market. With diverse business segments and a growing partnership with Nvidia, Nebius is poised to become a major player in the AI ecosystem. 

Artificial intelligence (AI) infrastructure investments are on the rise, and one Nvidia partner is uniquely positioned to take advantage of the trend. Back in October, a data center company known as Nebius Group (NBIS) listed on the Nasdaq stock exchange. At the time, the company was relatively unknown and did not experience much investor enthusiasm during its public offering.

The reason for this is that Nebius was not a high-profile start-up that investors were anxiously waiting to go public. Rather, Nebius was a spinoff from a Russian internet conglomerate, called Yandex. Following its listing on the Nasdaq, Nebius completed a $700 million private placement that caught the interest of semiconductor powerhouse Nvidia.

Throughout 2025, Nebius has worked closely with Nvidia as the company plays an important role in equipping data centers with Nvidia's latest Blackwell GPU architecture. In addition, Nebius has several other business segments spanning various pockets of the artificial intelligence (AI) realm, including software applications and autonomous driving. In my eyes, this diversified ecosystem draws parallels to Amazon. Let's explore how Nebius could emerge as the Amazon of the AI infrastructure market and assess if now is a good time to buy the stock.

Nebius and the Neocloud

Nebius is emerging as a major player in the neocloud market. Similar to CoreWeave and Oracle, Nebius offers AI infrastructure as a service. Essentially, the company outfits data centers with Nvidia GPU architectures and subsequently rents access to this infrastructure to other businesses. In some ways, this is not dissimilar to the objective of Amazon's cloud computing platform, Amazon Web Services (AWS). AWS allows developers to build and scale applications on Amazon's infrastructure, stored in data centers spread across the globe. Today, Nebius' AI infrastructure reach includes data centers in New Jersey, Kansas City, Iceland, Finland, France, the United Kingdom, and Israel.

According to the company's financials, Nebius' core infrastructure platform boasted a $249 million annual recurring revenue (ARR) run rate at the end of the first quarter. While this might seem small compared to the multibillion-dollar deals of its rivals, Nebius guided that its ARR run rate should be in the range of $750 million to $1 billion by the end of the year. Considering Nebius has only been operating as a standalone entity for less than a year, I see the company's growth as quite impressive and am optimistic that it can continue to scale as Nvidia releases subsequent GPU architectures in the coming years.

Nebius Has Much More Than Data Centers Going for It

Beyond the core infrastructure business, Nebius operates across three subsidiaries: Avride, Toloka, and TripleTen. Avride develops autonomous vehicles and delivery robots. The company currently has a fleet of delivery robots operating in Tokyo thanks to a partnership with Rakuten (which some call the 

Frequently Asked Questions (FAQS): 

Q: What is Nebius Group?

A: Nebius Group is a data center company that offers AI infrastructure as a service. It is a spinoff from the Russian internet conglomerate Yandex and is backed by Nvidia.

Q: How does Nebius Group compare to Amazon?

A: Nebius Group is similar to Amazon in that it operates critical cloud-based applications and is building a uniquely positioned ecosystem across different pockets of the AI infrastructure landscape, including data centers, software applications, and autonomous vehicles.

Q: What are the main business segments of Nebius Group?

A: Nebius Group operates across four main segments: core infrastructure, Avride (autonomous vehicles and delivery robots), Toloka (data-labeling platform), and TripleTen (online education platform).

Q: What is the current performance of Nebius Group's stock?

A: As of July 28, shares of Nebius Group have soared by 84% so far this year, significantly outperforming the S&P 500 and Nasdaq Composite indices.

Q: What is the future outlook for Nebius Group?

A: Nebius Group is expected to continue its growth trajectory as it scales its various business segments and benefits from partnerships with companies like Nvidia. Goldman Sachs has initiated a buy rating on Nebius with a $68 price target, implying 33% upside from current levels. 

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