Latest news with #TripleTen
Yahoo
3 days ago
- Business
- Yahoo
Should You Stay Invested in or Sell Nebius Stock Post Q2 Earnings?
Nebius Group N.V. NBIS stock has surged 36.7% since reporting blockbuster second-quarter 2025 earnings on Aug. 7. The company's revenues surged 625% year over year to $105.1 million. The increase in sales was primarily driven by strong performance in the company's core business and excellent execution by the TripleTen team. Image Source: Zacks Investment Research AI cloud infrastructure revenues grew more than nine times year over year, driven by demand for copper GPUs and near-peak GPU utilization. The company achieved positive EBITDA in its core AI infrastructure business earlier than expected. It raised its guidance for annualized run rate (ARR) revenues from the previous range of $750 million to $1 billion to a new range of $900 million to $1.1 billion. Nebius called the AI infrastructure boom a "once-in-a-generation" opportunity. Though the bullish tone is unmistakable, challenges remain for NBIS, given a volatile global macroeconomic environment. Tremendous competition in the AI cloud infrastructure space, heavy capital spending and execution risks point to a challenging road ahead. The question is whether investors should remain invested in NBIS stock or book profits and exit. Factors Driving Growth For NBIS Explosive revenue growth demonstrates NBIS's ability to capture demand in a rapidly expanding AI infrastructure market. With the new Blackwell GPUs entering the market at scale and its data center capacity expanding significantly in parallel, the company expects a substantial increase in sales by year-end. As a result, NBIS raised its year-end ARR guidance, which underscores the strength of its contracted pipeline and near-term visibility. On the earnings call, management touted an enviable customer roster expansion, including Cloudflare, Shopify, and other fast-growing AI startups (HeyGen, and Photoroom). Nebius is focused on boosting its data center footprint and its GPU deployments as part of its strategy to ramp up installed capacity across the United States and Europe. It plans to secure 220 megawatts of connected power (active or ready for GPU deployment), and this also includes data centers in New Jersey and Finland. The company is also finalizing two new large-scale greenfield sites in the United States. NBIS plans to build out over 1 gigawatt of power capacity by 2026, setting the stage for sustained growth into the AI compute boom. Apart from the booming core AI business, investors also need to look at the company's various stakes in some high-growth tech ventures that could emerge as powerful value drivers. ClickHouse stake is a standout. Other stakes include TripleTen, an edtech platform, and Avride, an autonomous vehicle platform. These various stakes give Nebius a unique edge among AI-infrastructure players. Nebius seems confident to effectively monetize these businesses and fuel its core business while minimizing dilution to existing shareholders and keeping debt in check. Why the Stock is Vulnerable Despite Q2 Revenue Surge NBIS is building out its data center capacity, and most GPU installations are scheduled for the fourth quarter, making the ARR and revenue growth back-end weighted. Any delays in the supply chain, installation, or customer spending delay could lead to missing the targets. Despite NBIS achieving positive adjusted EBITDA in the core AI infrastructure business, management reaffirmed that adjusted EBITDA will be negative for the full year 2025. However, it added that adjusted EBITDA will turn slightly positive by the end of the year at the group level. Nebius also reaffirmed its $2 billion 2025 capex guidance. Now, $2 billion capex is a huge cash outlay even with a $4 billion capital raised to date. Higher capex can be a concern if revenues do not keep up the required pace to sustain such high capital intensity, especially in a macro environment where AI demand cycles could fluctuate due to competitive pricing and regulatory changes. Moreover, scaling aggressively (multiple data centers in various regions) involves execution risk. While Nebius is rapidly acquiring clients, the AI infrastructure market remains intensely competitive. It faces tremendous competition in the AI cloud infrastructure space, which boasts behemoths like Amazon AMZN, Microsoft MSFT and Alphabet, as well as small players like CoreWeave CRWV. CRWV is another GPU-focused, hyper-growth pure play company in this space. CoreWeave reported 207% year-over-year revenue growth for the second quarter of 2025. On the other hand, Amazon Web Services and Microsoft's Azure cloud platform together dominate more than half of the cloud infrastructure services market and are now aggressively moving into AI infrastructure. Microsoft's exclusive partnership with OpenAI gives Azure cloud the priority to access leading AI models like GPT-5, while AMZN is ramping up investment to build its technology infrastructure, primarily related to AWS and for custom silicon like Trainium. Moreover, the financial firepower of these tech behemoths is incredible. Nebius, as a smaller player, may face pricing pressure and higher customer acquisition costs. Image Source: Zacks Investment Research Also, Nebius deconsolidated Toloka, which eliminates $50-$70 million in revenues from the projected 2025 revenue from group results. For group revenues, the company expects the metric to be between $450 million to $630 million. Analysts have kept their estimates unchanged for NBIS. NBIS' Stretched Valuation is Concerning Valuation-wise, Nebius seems overvalued, as suggested by the Value Score of F. Image Source: Zacks Investment Research In terms of Price/Book, NBIS shares are trading at 4.7X, lower than the Internet Software Services industry's ratio of 4.21X, but it could mean more risk than opportunity. Retain NBIS for Now Nebius's impressive second-quarter results make it an exciting AI infrastructure play to watch for. The growth trajectory is promising, and management is rapidly scaling capacity to meet demand. Given the stiff competition from hyperscalers like Amazon and Microsoft, NBIS faces significant pricing pressure and execution risks as it scales. Higher capital expenditures carry risk, especially amid a volatile macro environment. For investors already holding shares, the story remains compelling but for new entrants, it may be wise to wait for a better entry point. At present, NBIS carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Inc. (AMZN) : Free Stock Analysis Report Microsoft Corporation (MSFT) : Free Stock Analysis Report Nebius Group N.V. (NBIS) : Free Stock Analysis Report CoreWeave Inc. (CRWV) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Globe and Mail
3 days ago
- Business
- Globe and Mail
Should You Stay Invested in or Sell Nebius Stock Post Q2 Earnings?
Nebius Group N.V. NBIS stock has surged 36.7% since reporting blockbuster second-quarter 2025 earnings on Aug. 7. The company's revenues surged 625% year over year to $105.1 million. The increase in sales was primarily driven by strong performance in the company's core business and excellent execution by the TripleTen team. AI cloud infrastructure revenues grew more than nine times year over year, driven by demand for copper GPUs and near-peak GPU utilization. The company achieved positive EBITDA in its core AI infrastructure business earlier than expected. It raised its guidance for annualized run rate (ARR) revenues from the previous range of $750 million to $1 billion to a new range of $900 million to $1.1 billion. Nebius called the AI infrastructure boom a "once-in-a-generation" opportunity. Though the bullish tone is unmistakable, challenges remain for NBIS, given a volatile global macroeconomic environment. Tremendous competition in the AI cloud infrastructure space, heavy capital spending and execution risks point to a challenging road ahead. The question is whether investors should remain invested in NBIS stock or book profits and exit. Factors Driving Growth For NBIS Explosive revenue growth demonstrates NBIS's ability to capture demand in a rapidly expanding AI infrastructure market. With the new Blackwell GPUs entering the market at scale and its data center capacity expanding significantly in parallel, the company expects a substantial increase in sales by year-end. As a result, NBIS raised its year-end ARR guidance, which underscores the strength of its contracted pipeline and near-term visibility. On the earnings call, management touted an enviable customer roster expansion, including Cloudflare, Shopify, and other fast-growing AI startups (HeyGen, and Photoroom). Nebius is focused on boosting its data center footprint and its GPU deployments as part of its strategy to ramp up installed capacity across the United States and Europe. It plans to secure 220 megawatts of connected power (active or ready for GPU deployment), and this also includes data centers in New Jersey and Finland. The company is also finalizing two new large-scale greenfield sites in the United States. NBIS plans to build out over 1 gigawatt of power capacity by 2026, setting the stage for sustained growth into the AI compute boom. Apart from the booming core AI business, investors also need to look at the company's various stakes in some high-growth tech ventures that could emerge as powerful value drivers. ClickHouse stake is a standout. Other stakes include TripleTen, an edtech platform, and Avride, an autonomous vehicle platform. These various stakes give Nebius a unique edge among AI-infrastructure players. Nebius seems confident to effectively monetize these businesses and fuel its core business while minimizing dilution to existing shareholders and keeping debt in check. Why the Stock is Vulnerable Despite Q2 Revenue Surge NBIS is building out its data center capacity, and most GPU installations are scheduled for the fourth quarter, making the ARR and revenue growth back-end weighted. Any delays in the supply chain, installation, or customer spending delay could lead to missing the targets. Despite NBIS achieving positive adjusted EBITDA in the core AI infrastructure business, management reaffirmed that adjusted EBITDA will be negative for the full year 2025. However, it added that adjusted EBITDA will turn slightly positive by the end of the year at the group level. Nebius also reaffirmed its $2 billion 2025 capex guidance. Now, $2 billion capex is a huge cash outlay even with a $4 billion capital raised to date. Higher capex can be a concern if revenues do not keep up the required pace to sustain such high capital intensity, especially in a macro environment where AI demand cycles could fluctuate due to competitive pricing and regulatory changes. Moreover, scaling aggressively (multiple data centers in various regions) involves execution risk. While Nebius is rapidly acquiring clients, the AI infrastructure market remains intensely competitive. It faces tremendous competition in the AI cloud infrastructure space, which boasts behemoths like Amazon AMZN, Microsoft MSFT and Alphabet, as well as small players like CoreWeave CRWV. CRWV is another GPU-focused, hyper-growth pure play company in this space. CoreWeave reported 207% year-over-year revenue growth for the second quarter of 2025. On the other hand, Amazon Web Services and Microsoft's Azure cloud platform together dominate more than half of the cloud infrastructure services market and are now aggressively moving into AI infrastructure. Microsoft's exclusive partnership with OpenAI gives Azure cloud the priority to access leading AI models like GPT-5, while AMZN is ramping up investment to build its technology infrastructure, primarily related to AWS and for custom silicon like Trainium. Moreover, the financial firepower of these tech behemoths is incredible. Nebius, as a smaller player, may face pricing pressure and higher customer acquisition costs. Also, Nebius deconsolidated Toloka, which eliminates $50-$70 million in revenues from the projected 2025 revenue from group results. For group revenues, the company expects the metric to be between $450 million to $630 million. Analysts have kept their estimates unchanged for NBIS. NBIS' Stretched Valuation is Concerning Valuation-wise, Nebius seems overvalued, as suggested by the Value Score of F. In terms of Price/Book, NBIS shares are trading at 4.7X, lower than the Internet Software Services industry's ratio of 4.21X, but it could mean more risk than opportunity. Retain NBIS for Now Nebius's impressive second-quarter results make it an exciting AI infrastructure play to watch for. The growth trajectory is promising, and management is rapidly scaling capacity to meet demand. Given the stiff competition from hyperscalers like Amazon and Microsoft, NBIS faces significant pricing pressure and execution risks as it scales. Higher capital expenditures carry risk, especially amid a volatile macro environment. For investors already holding shares, the story remains compelling but for new entrants, it may be wise to wait for a better entry point. At present, NBIS carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. See our %%CTA_TEXT%% report – free today! 7 Best Stocks for the Next 30 Days Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Inc. (AMZN): Free Stock Analysis Report Microsoft Corporation (MSFT): Free Stock Analysis Report Nebius Group N.V. (NBIS): Free Stock Analysis Report CoreWeave Inc. (CRWV): Free Stock Analysis Report
Yahoo
09-08-2025
- Business
- Yahoo
Nebius' Q2 Loss Widens Y/Y, Revenues Rise on AI Demand, Stock Up
Nebius Group N.V. NBIS reported second-quarter 2025 adjusted net loss of $91.5 million, 49% wider than a loss of $61.6 million incurred a year ago. The company's revenues surged 625% year over year to $105.1 million. The increase in sales was primarily driven by strong performance in the company's core business and excellent execution by the TripleTen team. With R&D hubs across Europe, North America and Israel, Nebius' core business is an AI cloud platform designed for intensive workloads, powered by in-house developed software and hardware. Nebius provides AI builders with the compute power, storage, managed services and tools required to build, fine-tune and deploy their models. The Group also operates businesses under distinct brands, including Avride (autonomous driving technology) and TripleTen (a leading U.S.-based edtech platform for tech career reskilling). The Group also holds equity interests in other companies, including ClickHouse and Toloka. In the second quarter, following the completion of the investment transaction in Toloka—an AI development platform—Nebius ceased to hold majority voting power in the company. As a result, Toloka is no longer included in Nebius' consolidated financial statements and is now accounted for as an equity method investment. Toloka's results from prior periods have been reclassified as discontinued operations. As of June 30, 2025, there were outstanding employee stock options to purchase up to 7.5 million additional shares, with a weighted average exercise price of $87.83 per share, along with unvested restricted share units (RSUs) covering approximately 6.7 million shares. Following the earnings announcement, shares of the company jumped 19% in the trading session yesterday. Shares of the company have surged 59.4% in the past six months compared with the Zacks Internet - Software and Services industry's growth of 12.4%. Image Source: Zacks Investment Research Other Details NBIS reported an adjusted EBITDA loss of $21 million for the second quarter, narrower than the $58.1 million loss in the prior-year quarter. The company achieved positive EBITDA in its core AI infrastructure business earlier than previously projected. Sales, general and administrative expenses decreased 10% year over year to $68.2 million. Total operating costs and expenses increased 71% to $216.3 million As of June 30, 2025, NBIS' net income from operations was $502.5 million against a loss of $116.9 million in the year-ago period. Balance Sheet and Cash Flow As of June 30, 2025, NBIS had $1,679.3 million of cash and cash equivalents compared with $1,447 million as of March 31, 2025. Outlook Nebius continues to see strong momentum in its business, with demand for AI compute remaining exceptionally high. The company updated its full-year outlook. It raised its guidance for annualized run rate (ARR) revenue from the previous range of $750 million to $1 billion to a new range of $900 million to $1.1 billion. This increase is based on closed contracts for both existing and upcoming capacity, along with anticipated sales for the remainder of 2025. For core business revenue, the company is maintaining its guidance of $400 million to $600 million. For group revenue, the company has reaffirmed its previous guidance of $450 million to $630 million. This excludes the 2025 revenue guidance of $50 million to $70 million previously provided for Toloka. Nebius Group N.V. Price, Consensus and EPS Surprise Nebius Group N.V. price-consensus-eps-surprise-chart | Nebius Group N.V. Quote Adjusted EBITDA, as previously stated, is expected to be slightly positive at the group level by year-end, though the company still anticipates a full-year loss. NBIS maintained its capital expenditure guidance of approximately $2 billion for 2025. NBIS's Zacks Rank Nebius currently carries a Zacks Rank #4 (Sell). You can see the complete list of today's Zacks #1 (Strong Buy) Rank stocks here. Recent Performance of Other Companies Tyler Technologies, Inc. TYL reported better-than-expected second-quarter 2025 results. The company reported second-quarter non-GAAP earnings of $2.91 per share, which beat the Zacks Consensus Estimate by 4.7% and increased 21.3% year over year. Tyler Technologies' second-quarter revenues increased 10.2% year over year to $596.1 million. The top line topped the Zacks Consensus Estimate of $586.2 million by 1.7%. Shares of TYL increased 4.3% in the past year. Red Violet, Inc. RDVT came out with quarterly earnings of 28 cents per share, in line with the Zacks Consensus Estimate. This compares to earnings of 28 cents per share a year ago. Red Violet posted revenues of $21.8 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 1.51%. This compares to year-ago revenues of $19.1 million. Shares of RDVT have gained 58.1% in the past year. RingCentral RNG came out with quarterly earnings of $1.06 per share, beating the Zacks Consensus Estimate of $1.02 per share. This compares to earnings of 91 cents per share a year ago. RingCentral posted revenues of $620.4 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 0.43%. This compares to year-ago revenues of $592.91 million. Shares of RNG lost 9.2%in the past year. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Ringcentral, Inc. (RNG) : Free Stock Analysis Report Tyler Technologies, Inc. (TYL) : Free Stock Analysis Report Red Violet, Inc. (RDVT) : Free Stock Analysis Report Nebius Group N.V. (NBIS) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
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
