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Globe and Mail
2 days ago
- Business
- Globe and Mail
Could Nebius Group Be a Sleeper Growth Pick?
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. Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue » 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!* Now, it's worth noting Stock Advisor 's total average return is792% — a market-crushing outperformance compared to173%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 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. Adam Spatacco has positions in Alphabet, Amazon, Microsoft, Nvidia, and Shopify. The Motley Fool has positions in and recommends Advanced Micro Devices, Alphabet, Amazon, Microsoft, Nebius Group, Nvidia, and Shopify. The Motley Fool recommends Broadcom 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.
NBC News
7 days ago
- Business
- NBC News
Tesla's planned robotaxi launch in tech-friendly Austin has Musk playing catch-up in his hometown
Tesla's long-awaited entry into the robotaxi market — expected later this month — is coming to Austin, Texas, which has emerged as a key battleground for self-driving technology. CEO Elon Musk wrote in a post on X last week that the company has been testing Model Y vehicles with no safety drivers on board in the Texas capital for several days. Tesla's Austin robotaxi service will kick off with 10 vehicles and expand to thousands, moving into more cities if the launch goes well, Musk said in a May 20 interview with CNBC's David Faber. But while the market remains nascent, Tesla already faces a hefty amount of competition. The electric vehicle maker is one of several companies using Austin as a testing ground and debut market for self-driving technology. They're all taking advantage of Austin's robotics and AI talent, tech-savvy residents, affordable housing relative to other technology hubs and a city layout with horizontal traffic lights and wide roads that makes it particularly conducive to mapping software. But the biggest reason they love Texas may be the state's robotaxi-friendly regulation. Already in Austin are Alphabet's Waymo, Amazon's Zoox, Volkswagen subsidiary ADMT, and startup Avride. Waymo began offering robotaxi rides in Austin with Uber in March. Zoox started testing there last year, while ADMT has been testing Volkswagen's electric ID vehicles in the city since 2023. Avride is headquartered in Austin and is testing its autonomous vehicles and delivery robots in the Texas capital. Avride said it plans to begin offering paid robotaxi rides in the city later this year. 'The winners of the space are emerging, and it's just a matter of scaling,' said Toby Snuggs, head of sales and partnerships at Avride. According to Uber, its Austin launch with Waymo has proved successful thus far. Uber CEO Dara Khosrowshahi told investors in May that riders are choosing the robotaxis over regular cars, and the company is preparing to scale its Austin autonomous fleet to hundreds of vehicles in the coming months, ahead of a robotaxi expansion into Atlanta later this year. 'These approximately 100 vehicles are now busier than over 99% of all drivers in Austin in terms of completed trips per day,' Khosrowshahi told investors in May. Avride, which spun out of former parent company Yandex last year, has delivery robots in a fleet of about a dozen Hyundai Ioniq 5 vehicles in downtown Austin. The company said it plans to expand its Austin fleet to 100 vehicles later this year and aims to begin offering robotaxi rides in Dallas with Uber in 2025. Tesla primarily relies on camera-based systems and computer vision to navigate its vehicles rather than the Waymo model of using sophisticated sensors such as lidar and radar. Tesla's 'generalized' approach to robotaxis is more ambitious and less expensive than Waymo's, Musk said during Tesla's first-quarter earnings call with investors in April. Musk has been promising Tesla investors that a self-driving car is on the way for roughly a decade and has repeatedly missed self-imposed deadlines. 'There's probably a lot of ways it can be done, but we're the only ones that have done it,' Waymo co-CEO Tekedra Mawakana told CNBC's Deirdre Bosa in May. 'We've been doing it 24 hours a day for almost five years. And so to us, it's really important to focus on safety ... and then cost — not cost and then safety.' 'You have to be able to see at night, you have to be able to have this vision that's better than humans,' Mawakana said. 'Friendly' regulation In addition to Austin, Phoenix is an AV hub for companies such as Waymo, which has been testing in the region since 2016. Waymo and the auto manufacturer Magna International announced in May that they plan to double robotaxi production at their new plant in the Phoenix suburb of Mesa by the end of 2026. The San Francisco Bay Area, where Google began working on its self-driving car project in 2009, also has a large fleet of Waymo vehicles. Waymo opened its paid ride-hailing service to all local users almost a year ago, and said earlier this year that it's expanding its service to include another 27 square miles of coverage in the region. Zoox is also testing in San Francisco. While Tesla was started in the Bay Area, Musk moved its corporate headquarters to Austin in late 2021. In California, regulators at individual municipalities closely control where and how companies can operate autonomous vehicles. Texas has more relaxed regulations that benefit AV companies. When Waymo decided on Austin, it 'looked at the operational structure and how friendly the regulatory environment is,' said Shweta Shrivastava, Waymo's senior product and strategy executive. 'It's a tech-forward city — there's a lot of openness in terms of welcoming and adopting new technologies, so that's been great.' Part of that friendliness is a 2017 Texas law that prohibited municipalities from regulating autonomous vehicles, giving the state full authority. 'It's not like California, where you have certain regulations in LA, separate regulations in San Francisco, and municipalities between,' said Yulia Shveyko, Avride's head of communications. 'In Texas, it's the same all across the state, and this is one of the great things about being here as an operator.' The state is responsible for establishing the framework for autonomous vehicle operation, which includes that AVs must adhere to the same regulations as traditional vehicles, including registration, insurance and compliance with traffic laws. Texas law also requires AVs to have data recording systems to document potential accidents and incidents. The Texas Department of Transportation's 'role is to work with autonomous vehicle (AV) companies on what is needed to ensure the state's infrastructure is prepared for the safe and efficient rollout of AVs,' a spokesperson said in an emailed statement. Texas law allows for AV testing and operations on Texas roadways, 'as long as they meet the same safety and insurance requirements as every other vehicle on the road.' Companies are choosing to test their AVs in Austin because of its 'lower barriers both in terms of regulation and the acceptance by consumers in the area,' said Wassym Bensaid, chief software officer at EV maker Rivian. 'This is really what makes Austin and San Francisco more open to this technology,' Bensaid added. Rivian in March rolled out a ' hands-free version ' of its driver-assistance system for highway driving, and the company plans to have an 'eyes-off-hands-off' system available by the end of next year, Bensaid said. Texas' transportation department created an AV task force in 2019. Formal meetings take place two to four times per year. Members of the task force include representatives from other agencies in the state and public entities as well as key industry stakeholders, its website says. Waymo is an active member of the task force, the company confirmed. The state's transportation department didn't respond to CNBC's requests for further information about the task force. Waymo has built goodwill with Austin officials by engaging with Texas stakeholders since it began testing in the city in 2015, the company told CNBC. Known then as Google's self-driving car project, the company started driving on Austin streets a decade ago with safety drivers on board. Waymo closed Austin operations in 2019 to focus on its testing efforts in Phoenix, the spokesperson said, adding that it returned in March 2023, when the company's technology was 'more mature.' Long before Waymo began testing in Austin, University of Texas at Austin's Peter Stone entered his team's vehicle in the Defense Advanced Research Projects Agency Urban Challenge in 2007. Stone is the director of the Learning Agents Research Group at UT, and his team's entry was called Austin Robot Technology — one of the first deployments of a partially automated driving system on the streets of Austin. Stone has been at the university for 23 years and has taught several students who are now employees at Waymo and other car companies, he said. Advancements in machine learning and years of testing have contributed to companies such as Waymo being able to navigate roads better than some human drivers, he said. Lone Star influence Officials from around the U.S. and the world are looking to Texas as a model for self-driving regulations, experts said. Some regulation, however, is still being sorted out. Lewis Leff, City of Austin assistant director, said that more cities are reaching out to ask, 'How do you handle these situations?' Cities that have inquired include New Orleans and Nashville, Tennessee, as well as some outside the U.S., Austin officials told CNBC. 'We were in Japan launching our service with Rakuten earlier this year and the minister of economics, and the questions they were asking was, 'What is the regulation in Texas like?'' Avride's Snuggs said. Meanwhile, the AV industry is pushing for federal-level standards that would ease regulatory uncertainty around putting new tech on public roads. In Tesla's third-quarter earnings in October, Musk said that should Donald Trump win the coming election, he would use his influence with the administration to push for federal AV regulation. As president, Trump and his transportation secretary, Sean Duffy, have both been supportive of federal-level standards, Waymo's Mawakana told CNBC in May, adding that she's 'optimistic' it will be arranged sometime during this presidential term. Waymo supports proposed federal frameworks for national safety standards and has voiced that support to the Trump administration, a company spokesperson said. 'Now's the time,' Mawakana said, pointing to places such as China, which invests in AV supply chains and grants and has federal AV rules. 'We should be in the exact same position.' 'Changing environments' The concentration of regulatory power, however, comes with some concern that cities will be mostly powerless should issues arise, experts said. A state senate transportation hearing in September addressed the lack of regulation in Texas for driverless vehicles. 'To many of our first responders communities, this is new territory for them,' Democratic Texas state Sen. Sarah Eckhardt reportedly said at the hearing. 'I mean pulling over an autonomous vehicle, you know, what do you do? An autonomous vehicle in an accident, what do you do?' In one example, Houston city officials reportedly faced delays in enforcement instructions from state regulators after Cruise cars caused a backup on the city's Montrose Boulevard in 2023. Texas has at least 17 companies that have deployed or tested on roads, said Nick Steingart, director of state affairs at Alliance for Automotive Innovation, at the state hearing. 'As the technology matured and evolved, we fully expected that the laws would evolve as well,' Steingart said. The state is considering legislation that may provide some clarity, according to Austin's transportation department. Several AV companies in Austin have safety protocols and proactively work with local first responders. Zoox, for example, has held trainings with first responders and met with city officials, a spokesperson said. But there is technically no requirement for AV companies to engage with emergency services, Austin officials confirmed. Companies hoping to succeed in Texas often begin their conversations with the state by focusing on safety first, Austin's Leff said. 'They note their technology can recognize a fire vehicle or a hand signal, so there's a lot of focus on things like that,' he said. Austin's transportation department has been collecting information about incidents that pose a risk to public safety and relaying that data to the appropriate operators, the city said. It places 'all reports we receive about AV incidents into our dashboard, about half of which over time have come from our city department colleagues,' city officials said. Waymo, which has become one of the most visible leaders in the robotaxi market, has said it has made safety a priority. Mawakana and co-CEO Dmitri Dolgov told employees at a November all-hands meeting that they should scale up as aggressively as possible but do so with safety at the forefront of all their efforts, people familiar with the matter told CNBC. The people asked not to be named because they were not authorized to speak publicly. Waymo tracks incidents involving its vehicles but doesn't share city-level data publicly, a company spokesperson said. With Texas regulation around AVs relatively lax, some AV makers worry what impact a collision by one of the players in the state could mean for the entire industry. 'It takes a long time to earn trust, and it doesn't take that long to lose it,' Mawakana said. 'There can always be an overreaction by regulators — their job is to protect the public.' Already, the AV industry has suffered a number of black eyes. General Motors shut down its Cruise robotaxi service in December after one of its vehicles dragged a woman 20 feet on a street in San Francisco in 2023. Uber also pulled out of the self-driving space after one of its self-driving test vehicles struck and killed a woman in Arizona in 2018. In Austin, a woman posted a TikTok video in April showing a Waymo vehicle that she said had abruptly stopped underneath a highway with her and another passenger inside. After other cars began honking at them, they contacted customer support for help but were told the Waymo couldn't be moved. The woman said the car locked the passengers inside until they threatened to go live on TikTok. 'Now we're walking,' the woman says in the video, 'and our Waymo is still there. This is insane.' Riders 'always have the ability to pause their ride and exit the vehicle when desired by pulling the handle twice — once to unlock and another to open the door,' a Waymo spokesperson said in response to the video. Despite such incidents, UT's Stone said he thinks cities are being overly cautious. 'The standard people are aiming for is perfection, and the standard they should be aiming for is better than people,' he said. 'A fatal car accident rarely makes the local news, but if autonomous cars reduce that number, it should be seen as a huge societal win.'
CNBC
7 days ago
- Business
- CNBC
Tesla's planned robotaxi launch in tech-friendly Austin has Musk playing catch-up in his hometown
Tesla's long-awaited entry into the robotaxi market — expected later this month — is coming to Austin, Texas, which has emerged as a key battleground for self-driving technology. CEO Elon Musk wrote in a post on X last week that the company has been testing Model Y vehicles with no safety drivers on board in the Texas capital for several days. Tesla's Austin robotaxi service will kick off with 10 vehicles and expand to thousands, moving into more cities if the launch goes well, Musk said in a May 20 interview with CNBC's David Faber. But while the market remains nascent, Tesla already faces a hefty amount of competition. The electric vehicle maker is one of several companies using Austin as a testing ground and debut market for self-driving technology. They're all taking advantage of Austin's robotics and AI talent, tech-savvy residents, affordable housing relative to other technology hubs and a city layout with horizontal traffic lights and wide roads that makes it particularly conducive to mapping software. But the biggest reason they love Texas may be the state's robotaxi-friendly regulation. Already in Austin are Alphabet's Waymo, Amazon's Zoox, Volkswagen subsidiary ADMT, and startup Avride. Waymo began offering robotaxi rides in Austin with Uber in March. Zoox started testing there last year, while ADMT has been testing Volkswagen's electric ID vehicles in the city since 2023. Avride is headquartered in Austin and is testing its autonomous vehicles and delivery robots in the Texas capital. Avride said it plans to begin offering paid robotaxi rides in the city later this year. "The winners of the space are emerging, and it's just a matter of scaling," said Toby Snuggs, head of sales and partnerships at Avride. According to Uber, its Austin launch with Waymo has proved successful thus far. Uber CEO Dara Khosrowshahi told investors in May that riders are choosing the robotaxis over regular cars, and the company is preparing to scale its Austin autonomous fleet to hundreds of vehicles in the coming months, ahead of a robotaxi expansion into Atlanta later this year. "These approximately 100 vehicles are now busier than over 99% of all drivers in Austin in terms of completed trips per day," Khosrowshahi told investors in May. Avride, which spun out of former parent company Yandex last year, has delivery robots in a fleet of about a dozen Hyundai Ioniq 5 vehicles in downtown Austin. The company said it plans to expand its Austin fleet to 100 vehicles later this year and aims to begin offering robotaxi rides in Dallas with Uber in 2025. Tesla primarily relies on camera-based systems and computer vision to navigate its vehicles rather than the Waymo model of using sophisticated sensors such as lidar and radar. Tesla's "generalized" approach to robotaxis is more ambitious and less expensive than Waymo's, Musk said during Tesla's first-quarter earnings call with investors in April. Musk has been promising Tesla investors that a self-driving car is on the way for roughly a decade and has repeatedly missed self-imposed deadlines. "There's probably a lot of ways it can be done, but we're the only ones that have done it," Waymo co-CEO Tekedra Mawakana told CNBC's Deirdre Bosa in May. "We've been doing it 24 hours a day for almost five years. And so to us, it's really important to focus on safety ... and then cost — not cost and then safety." "You have to be able to see at night, you have to be able to have this vision that's better than humans," Mawakana said. In addition to Austin, Phoenix is an AV hub for companies such as Waymo, which has been testing in the region since 2016. Waymo and the auto manufacturer Magna International announced in May that they plan to double robotaxi production at their new plant in the Phoenix suburb of Mesa by the end of 2026. The San Francisco Bay Area, where Google began working on its self-driving car project in 2009, also has a large fleet of Waymo vehicles. Waymo opened its paid ride-hailing service to all local users almost a year ago, and said earlier this year that it's expanding its service to include another 27 square miles of coverage in the region. Zoox is also testing in San Francisco. While Tesla was started in the Bay Area, Musk moved its corporate headquarters to Austin in late 2021. In California, regulators at individual municipalities closely control where and how companies can operate autonomous vehicles. Texas has more relaxed regulations that benefit AV companies. When Waymo decided on Austin, it "looked at the operational structure and how friendly the regulatory environment is," said Shweta Shrivastava, Waymo's senior product and strategy executive. "It's a tech-forward city — there's a lot of openness in terms of welcoming and adopting new technologies, so that's been great." Part of that friendliness is a 2017 Texas law that prohibited municipalities from regulating autonomous vehicles, giving the state full authority. "It's not like California, where you have certain regulations in LA, separate regulations in San Francisco, and municipalities between," said Yulia Shveyko, Avride's head of communications. "In Texas, it's the same all across the state, and this is one of the great things about being here as an operator." The state is responsible for establishing the framework for autonomous vehicle operation, which includes that AVs must adhere to the same regulations as traditional vehicles, including registration, insurance and compliance with traffic laws. Texas law also requires AVs to have data recording systems to document potential accidents and incidents. The Texas Department of Transportation's "role is to work with autonomous vehicle (AV) companies on what is needed to ensure the state's infrastructure is prepared for the safe and efficient rollout of AVs," a spokesperson said in an emailed statement. Texas law allows for AV testing and operations on Texas roadways, "as long as they meet the same safety and insurance requirements as every other vehicle on the road." Companies are choosing to test their AVs in Austin because of its "lower barriers both in terms of regulation and the acceptance by consumers in the area," said Wassym Bensaid, chief software officer at EV maker Rivian. "This is really what makes Austin and San Francisco more open to this technology," Bensaid added. Rivian in March rolled out a "hands-free version" of its driver-assistance system for highway driving, and the company plans to have an "eyes-off-hands-off" system available by the end of next year, Bensaid said. Texas' transportation department created an AV task force in 2019. Formal meetings take place two to four times per year. Members of the task force include representatives from other agencies in the state and public entities as well as key industry stakeholders, its website says. Waymo is an active member of the task force, the company confirmed. The state's transportation department didn't respond to CNBC's requests for further information about the task force. Waymo has built goodwill with Austin officials by engaging with Texas stakeholders since it began testing in the city in 2015, the company told CNBC. Known then as Google's self-driving car project, the company started driving on Austin streets a decade ago with safety drivers on board. Waymo closed Austin operations in 2019 to focus on its testing efforts in Phoenix, the spokesperson said, adding that it returned in March 2023, when the company's technology was "more mature." Long before Waymo began testing in Austin, University of Texas at Austin's Peter Stone entered his team's vehicle in the Defense Advanced Research Projects Agency Urban Challenge in 2007. Stone is the director of the Learning Agents Research Group at UT, and his team's entry was called Austin Robot Technology — one of the first deployments of a partially automated driving system on the streets of Austin. Stone has been at the university for 23 years and has taught several students who are now employees at Waymo and other car companies, he said. Advancements in machine learning and years of testing have contributed to companies such as Waymo being able to navigate roads better than some human drivers, he said. Officials from around the U.S. and the world are looking to Texas as a model for self-driving regulations, experts said. Some regulation, however, is still being sorted out. Lewis Leff, City of Austin assistant director, said that more cities are reaching out to ask, "How do you handle these situations?" Cities that have inquired include New Orleans and Nashville, Tennessee, as well as some outside the U.S., Austin officials told CNBC. "We were in Japan launching our service with Rakuten earlier this year and the minister of economics, and the questions they were asking was, 'What is the regulation in Texas like?'" Avride's Snuggs said. Meanwhile, the AV industry is pushing for federal-level standards that would ease regulatory uncertainty around putting new tech on public roads. In Tesla's third-quarter earnings in October, Musk said that should Donald Trump win the coming election, he would use his influence with the administration to push for federal AV regulation. As president, Trump and his transportation secretary, Sean Duffy, have both been supportive of federal-level standards, Waymo's Mawakana told CNBC in May, adding that she's "optimistic" it will be arranged sometime during this presidential term. Waymo supports proposed federal frameworks for national safety standards and has voiced that support to the Trump administration, a company spokesperson said. "Now's the time," Mawakana said, pointing to places such as China, which invests in AV supply chains and grants and has federal AV rules. "We should be in the exact same position." The concentration of regulatory power, however, comes with some concern that cities will be mostly powerless should issues arise, experts said. A state senate transportation hearing in September addressed the lack of regulation in Texas for driverless vehicles. "To many of our first responders communities, this is new territory for them," Democratic Texas state Sen. Sarah Eckhardt reportedly said at the hearing. "I mean pulling over an autonomous vehicle, you know, what do you do? An autonomous vehicle in an accident, what do you do?" In one example, Houston city officials reportedly faced delays in enforcement instructions from state regulators after Cruise cars caused a backup on the city's Montrose Boulevard in 2023. Texas has at least 17 companies that have deployed or tested on roads, said Nick Steingart, director of state affairs at Alliance for Automotive Innovation, at the state hearing. "As the technology matured and evolved, we fully expected that the laws would evolve as well," Steingart said. The state is considering legislation that may provide some clarity, according to Austin's transportation department. Several AV companies in Austin have safety protocols and proactively work with local first responders. Zoox, for example, has held trainings with first responders and met with city officials, a spokesperson said. But there is technically no requirement for AV companies to engage with emergency services, Austin officials confirmed. Companies hoping to succeed in Texas often begin their conversations with the state by focusing on safety first, Austin's Leff said. "They note their technology can recognize a fire vehicle or a hand signal, so there's a lot of focus on things like that," he said. Austin's transportation department has been collecting information about incidents that pose a risk to public safety and relaying that data to the appropriate operators, the city said. It places "all reports we receive about AV incidents into our dashboard, about half of which over time have come from our city department colleagues," city officials said. Waymo, which has become one of the most visible leaders in the robotaxi market, has said it has made safety a priority. Mawakana and co-CEO Dmitri Dolgov told employees at a November all-hands meeting that they should scale up as aggressively as possible but do so with safety at the forefront of all their efforts, people familiar with the matter told CNBC. The people asked not to be named because they were not authorized to speak publicly. Waymo tracks incidents involving its vehicles but doesn't share city-level data publicly, a company spokesperson said. With Texas regulation around AVs relatively lax, some AV makers worry what impact a collision by one of the players in the state could mean for the entire industry. "It takes a long time to earn trust, and it doesn't take that long to lose it," Mawakana said. "There can always be an overreaction by regulators — their job is to protect the public." Already, the AV industry has suffered a number of black eyes. General Motors shut down its Cruise robotaxi service in December after one of its vehicles dragged a woman 20 feet on a street in San Francisco in 2023. Uber also pulled out of the self-driving space after one of its self-driving test vehicles struck and killed a woman in Arizona in 2018. In Austin, a woman posted a TikTok video in April showing a Waymo vehicle that she said had abruptly stopped underneath a highway with her and another passenger inside. After other cars began honking at them, they contacted customer support for help but were told the Waymo couldn't be moved. The woman said the car locked the passengers inside until they threatened to go live on TikTok. "Now we're walking," the woman says in the video, "and our Waymo is still there. This is insane." Riders "always have the ability to pause their ride and exit the vehicle when desired by pulling the handle twice — once to unlock and another to open the door," a Waymo spokesperson said in response to the video. Despite such incidents, UT's Stone said he thinks cities are being overly cautious. "The standard people are aiming for is perfection, and the standard they should be aiming for is better than people," he said. "A fatal car accident rarely makes the local news, but if autonomous cars reduce that number, it should be seen as a huge societal win."
Yahoo
02-06-2025
- Business
- Yahoo
Diversification Strategy Sparks Bullish Impetus in Nebius Group Stock (NBIS)
When I first invested in Nebius Group (NBIS) earlier this year, I approached it with cautious optimism—hyper-growth stocks carry inherent risk. Today, with the stock up over 50%, I remain confident and recently raised my 12-month price target to $60, implying further upside of over 50%. Easily unpack a company's performance with TipRanks' new KPI Data for smart investment decisions Receive undervalued, market resilient stocks right to your inbox with TipRanks' Smart Value Newsletter While its EV/Sales multiple above 50x may appear steep, it's less relevant for a vertically integrated AI infrastructure leader positioned to capitalize on current momentum. In my view, Nebius remains one of the most compelling growth stories in tech today. Nebius's recent growth is off the charts. Nebius posted exceptional growth in Q1 FY2025, reporting $55.3 million in revenue—a 385% year-over-year increase—driven by surging global demand for AI and generative computing solutions. Management projects annual recurring revenue (ARR) between $750 million and $1 billion by year-end, underscoring the company's ambitious trajectory. What sets Nebius apart is its diversified, vertically integrated approach. Beyond its core AI cloud services, the company operates in several high-growth areas: Avride, an autonomous mobility venture; Toloka, a data-labeling and AI development platform backed by Jeff Bezos's venture arm; and TripleTen, an edtech startup focused on tech career reskilling. This strategic breadth positions Nebius to tap into multiple revenue streams within the expanding AI ecosystem. While some still associate the company with its Yandex origins, Nebius has taken definitive steps to establish its independence, restructuring in 2022, relocating its headquarters to Amsterdam, and relisting on Nasdaq. Its $700 million funding round in December, led by investors including NVIDIA and Accel, affirms growing confidence in Nebius as a credible and emerging leader in global AI infrastructure. While Nebius continues to invest aggressively, it is beginning to demonstrate operating leverage. In the same quarter that delivered standout revenue growth, the company reduced its adjusted EBITDA loss from $70.9 million a year ago to $62.6 million—an encouraging sign of improving cost efficiency. A year ago, operating expenses stood at an unsustainable 827% of revenue; that figure has since declined to 334%. Though still high, the downward trend points toward greater operational discipline. Nebius's cloud-based model is inherently scalable, allowing margins to expand as revenue grows and fixed costs are spread across a larger customer base. Management is targeting adjusted EBITDA profitability in the second half of FY2025—a goal that appears increasingly attainable given the company's accelerating top-line growth and improving cost structure Let's tackle the elephant in the room—valuation. Based on an EV/Sales multiple of approximately 50x, Nebius appears expensive. For reference, Snowflake (SNOW) had a near-peak multiple of around 150x EV/Sales in early 2021 and fell rapidly to around 20x as revenues scaled. It's reasonable to expect Nebius's valuation will experience a similar development. Currently, Nebius stock exhibits extreme bullishness, as indicated by technical indicators, including the 14-day RSI, which stands at around 70. High volatility and irrational exuberance are typical among rapidly growing stocks, so investors should prepare for volatility, even when it's unlikely or difficult to ascertain, by examining the stock's price performance relative to its peers. Sentiment is always a risk with highly valued hyper-growth plays. However, when I consider the company's peers, Databricks or CoreWeave, Nebius's valuation is not entirely out of sync with the valuation models I commonly see across the AI infrastructure space. High multiples today can come back to earth in the near future as revenues move on up, making the current premium worthwhile. On Wall Street, Nebius has a consensus Strong Buy rating based on three Buys, zero Holds, and zero Sells. The average NBIS stock price target of $52.33 indicates a 37% upside potential over the next 12 months. However, if it reaches $60, we're looking at a return of over 50% within 12 months. I continue to view Nebius stock as one of the more compelling high-growth opportunities in today's market. While the stock may appear volatile and expensive by traditional metrics, its strong revenue growth, improving margins, strategic geopolitical positioning, and diversified revenue streams justify the current valuation. I maintain a bullish price target of $60, reflecting my confidence in management's execution capabilities and the potential for a favorable macro environment next year. For investors seeking high-risk, high-reward opportunities, Nebius stands out as a resilient and promising player in the AI space. Disclaimer & DisclosureReport an Issue Sign in to access your portfolio
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30-04-2025
- Automotive
- Yahoo
Maplebear Inc. (CART): Among the Best Food Delivery Stocks to Buy
We recently published a list of . In this article, we are going to take a look at where Maplebear Inc. (NASDAQ:CART) stands against other ride sharing and food delivery stocks. According to a report by Mordor Intelligence, the global ride-sharing market has a size of $53.02 billion as of 2025. It is expected to grow at a compound annual growth rate of 11.45% between 2025 and 2030, reaching $91.16 billion at the end of the forecast period. Europe is the largest market for the ride-sharing industry. However, Asia Pacific takes the lead as the fastest-growing. The industry has a low market concentration. Some of the key reasons behind this growth include a rise in initiatives to bring carbon emissions down and rapid urbanization, as well as trends such as lack of efficient public transportation services in various countries. The rising expenses of vehicle ownership and maintenance are also significant growth drivers for this industry. Similarly, innovative trends in the ride-sharing industry, such as driverless vehicles, are also allowing growth. The online food delivery industry has become a force to reckon with due to recent technological advancements. According to a report by Mordor Intelligence, the online food delivery market has a size of $780 billion as of 2025. It is anticipated to grow at a compound annual growth rate of 15.01% between 2025 and 2030, reaching $1.57 trillion at the end of the forecast period. Similar to the ride-sharing industry, the food delivery sector has a low market concentration. Asia Pacific is the largest market for the industry, and it is also the fastest growing. Some of the primary factors behind growth in this sector to be urbanization, technological advancements, and rapidly changing consumer lifestyles. Since smartphones and high-speed internet have become a pivotal part of consumer life, online food ordering has become accessible and seamless. Similarly, the emergence of cloud kitchens, which only offer food delivery without traditional dining options, has slashed operational expenses and allowed restaurants to make food delivery their specialty, further bolstering market scalability. READ ALSO: and . The use of innovative technology is increasingly altering the food delivery and ride-sharing industries. For instance, Grubhub and Avride announced a collaboration to bring autonomous robot food delivery to colleges across the country. While the service is currently only available at The Ohio State University, students studying at Grubhub partnered campuses can easily order snacks, meals, and convenience items through delivery carried out by robots. The first fleet of the collaboration's 100 robots is currently active in The Ohio State University campus. The fleet is fitted with next-generation models that can manage high delivery volumes in the university's premises. This advanced technology was derived from Avride's expertise in autonomous vehicles, as its robots are reliable, intelligent, and able to navigate challenging environmental conditions such as snow and rain. Since both the food delivery and ride-sharing industries are expected to grow at notable compound annual growth rates, let's look at the best ride-sharing and food delivery stocks that are popular among elite hedge funds. We sifted through stock screeners, financial media reports, and ETFs to compile a list of ride-sharing and food delivery stocks and ranked them in ascending order of hedge fund sentiment as of fiscal Q4 2024. We sourced the hedge fund sentiment data from Insider Monkey's database. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter's strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (). A businesswoman using her mobile device to shop on a ecommerce platform. Number of Hedge Fund Holders: 60 Maplebear Inc. (NASDAQ:CART) designs and develops an online app that offers grocery delivery and pick-up services. It offers Instacart, allowing users to connect with personal shoppers in their vicinity who deliver and pick up food from local stores. In a report released on April 11, Andrew Boone from JMP Securities reiterated a Buy rating on Maplebear Inc. (NASDAQ:CART) and set a price target of $55.00. The company announced a new partnership with Dierbergs Markets, a 27-store independent grocer, on April 8 to expand its operations and offer same-day delivery in as fast as 60 minutes. The partnership will include Dierbergs on the Instacart App, allowing customers access to fresh food, grocery options, and household items for same-day delivery. Dierbergs is also leveraging Carrot Tags, Instacart's electronic shelf label, to help customers locate their ordered products easily and boost order accuracy. Maplebear Inc. (NASDAQ:CART) also introduced Smart Shop on March 18, which employs generative AI to improve the shopping experience and increase online grocery shopping efficiency by analyzing customers' dietary preferences and habits. Overall, CART ranks 3rd on our list of the best ride sharing and food delivery stocks. While we acknowledge the potential for CART as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than CART but trades at less than 5 times its earnings, check out our report about this cheapest AI stock. READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires. Disclosure: None. This article is originally published at Insider Monkey. Sign in to access your portfolio
