Founded in Amsterdam and rebranded from Yandex N.V. in 2024 following the divestment of its Russian businesses, Nebius is now a European-headquartered holding company with a global presence across North America, Europe, and Israel. Its core business is Nebius, an AI-native cloud platform designed for the most intensive AI workloads, underpinned by large-scale GPU clusters and proprietary developer tools.
The market opportunity for Nebius is vast and expanding. The company estimates its addressable market at $33 billion in 2023, projected to exceed $260 billion by 2030, as demand for AI compute and data infrastructure accelerates globally. Recent months have seen a surge in generative AI adoption, with enterprises and research institutions racing to secure access to advanced GPU resources.
Nebius’s June 2025 announcement of a major UK data center deployment using NVIDIA’s Blackwell Ultra GPUs exemplifies its strategy: build state-of-the-art, power-dense infrastructure in key geographies to support national AI ambitions and attract blue-chip contracts. Simultaneously, the imminent launch of a 300MW data center in New Jersey is expected to unlock the scale necessary to compete for multi-year, high-visibility contracts with leading AI developers—potentially including OpenAI or Google.
Financial performance has been nothing short of explosive. In Q1 2025, Nebius reported revenue of $55.3 million, a 385% year-over-year increase, following a 466% surge in Q4 2024. The company’s annualized run-rate revenue (ARR) reached $310 million in April, with management reaffirming guidance of $750 million to $1 billion in ARR by year-end—up from an initial $500 million to $1 billion range set at IPO.
The cost of this hypergrowth is substantial. Operating expenses nearly doubled year-over-year in Q1 2025 to $184.8 million, with depreciation and amortization up 453%—a direct consequence of rapid infrastructure buildout. Adjusted EBITDA loss for the quarter was $62.6 million, and net loss from continuing operations reached $113.6 million.
While these losses are narrowing relative to revenue growth, they underscore the execution challenge: can Nebius bend its cost curve quickly enough to achieve sustainable margins? Management projects EBITDA positivity in the second half of 2025, a milestone that, if achieved, could catalyze a significant re-rating of the stock.
Nebius’s competitive positioning is defined by several sustainable advantages:
Nevertheless, the risks are as large as the opportunities. Scaling at this pace brings operational complexity, as evidenced by the 96% year-over-year rise in operating costs and shrinking cash reserves (down to $1.45 billion from $2.45 billion at year-end 2024). The company’s reliance on a single high-growth revenue stream (AI infrastructure) exposes it to demand cyclicality and competitive pressure from hyperscalers like AWS and Azure.
Geographic expansion, while strategic, introduces execution risk and potential geopolitical headwinds. Moreover, continued capital intensity raises the specter of future dilution if growth stalls or if the company is forced to raise additional funds before reaching profitability.
As of late June 2025, Nebius trades at a market capitalization of $12.34 billion and an enterprise value of $11.08 billion. The company’s price-to-sales ratio is elevated at 76.48, reflecting the market’s expectation of continued hypergrowth. The forward price-to-earnings ratio is not meaningful given current losses, but the trailing P/E ratio stands at 58.25, indicating a premium to many peers.
Nebius Group offers a compelling, albeit high-risk, entry point into the AI infrastructure arms race. The company’s combination of hypergrowth, operational efficiency, and deep technology partnerships positions it as a potential long-term winner in a market where scale and speed are decisive. Recent developments—including the UK Blackwell deployment, New Jersey data center, and Toloka’s funding round—underscore both execution momentum and the ability to attract strategic capital.
However, the path to profitability remains fraught with execution risk, and the company’s valuation already bakes in substantial future success. For investors with a multi-year horizon and a tolerance for volatility, Nebius represents a differentiated, high-upside bet on the future of AI compute. For those more risk-averse, it may be prudent to wait for clearer signs of margin expansion and contract wins before initiating or adding to a position.
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