Is NBIS a Good Stock to Buy?

Company Overview and Growth Trajectory

Nebius is an AI infrastructure company based in Amsterdam, specializing in computing capacity critical for artificial intelligence applications. The company recently reported exceptional financial results, with revenue in the second quarter of 2025 soaring by over 600% year-over-year to $105.1 million. This significant growth is complemented by the company’s core business achieving positive adjusted EBITDA ahead of schedule, indicating improving profitability.

Nebius raised its annualized run-rate revenue (ARR) guidance for 2025 to a range of $900 million to $1.1 billion, reflecting strong momentum in its operations. Management plans to aggressively scale capacity, aiming to secure over 1 gigawatt of power capacity by the end of 2026 to support the surging AI infrastructure demand. These robust fundamentals suggest a company positioned for significant expansion as AI adoption proliferates.

Stock Performance and Investor Sentiment

NBIS stock has witnessed remarkable price appreciation in 2025. From a low in April, the shares have climbed nearly 260%, and the stock shows a year-to-date return exceeding 140% as of August 2025. This reflects substantial investor enthusiasm for Nebius’s business model and prospects. Technical indicators show a mostly bullish trend, with positive signals outweighing negatives.

Investor confidence is further bolstered by CEO Arkady Volozh’s optimistic commentary about scaling AI infrastructure capacity and capitalizing on emerging AI applications. Analysts remain cautiously optimistic, recognizing the company’s growth potential balanced by typical tech sector risks.

Industry Position and Competitive Landscape

Nebius operates in a highly competitive environment with peers like CoreWeave, who have larger data center scales and stronger NVIDIA partnerships. While Nebius has gained rapid traction, some analysts note it is somewhat outpaced by these competitors in areas like GPU access and data center capacity. Strong competition could weigh on the stock’s valuation in the near term, as growth investors anticipate market share battles in the AI infrastructure space.

Nevertheless, Nebius’s ability to achieve an impressive scale-up rapidly and its aggressive capacity expansion plans indicate a company attempting to secure a strong foothold in the lucrative AI market. Importantly, the industry’s growth drivers—ranging from AI software advances to broader technology adoption—support sustained demand for Nebius’s services.

Valuation and Risks

Despite impressive growth metrics, some investment analysts question whether NBIS’s current valuation adequately reflects its rapid ascent. The company’s market valuation is seen by some as stretched relative to forecasted FY2026 sales, which might limit upside potential for new buyers at current levels. One report highlights that while Nebius posted strong earnings, the valuation at approximately 11.6 times FY2026 sales signals modest room for further gains without new catalysts.

Additional risks include dependency on continued robust demand for AI infrastructure, potential GPU shortages, and the challenges of sustaining aggressive capacity expansion without diluting financial strength. There is also execution risk inherent in growing data center footprints and securing substantial power capacity efficiently.

Market Outlook and Economic Context

The broader market environment remains favorable for growth stocks like NBIS. Low interest rates and positive economic indicators have heightened investor appetite for technology and innovative sectors. The resurgence in SPACs and growth-oriented investments adds supportive momentum. However, macroeconomic uncertainties around inflation, interest rate policies, or global tech supply chain constraints could impact Nebius’s stock price volatility.

Summary: Is NBIS a Good Stock to Buy?

• Growth Potential: Nebius is one of the fastest-growing AI infrastructure companies, with revenues up by over 600% YoY and an ambitious target to scale power capacity, positioning it well in a high-demand industry.
• Stock Momentum: The stock has delivered impressive returns in 2025, supported by strong earnings beats and positive management outlook.
• Competitive Challenges: While growth is strong, Nebius faces stiff competition from better-capitalized peers, which could cap valuation and growth.
• Valuation Concerns: The stock’s valuation may already price in much of the expected growth, limiting upside for cautious buyers.
• Risks: Execution risks, supply constraints, and tech sector volatility require close monitoring.

In Conclusion, NBIS stock presents an attractive opportunity for investors with a tolerance for growth stock volatility and belief in AI infrastructure’s robust potential. The company’s operational execution and ability to manage competitive and scaling challenges will be key to sustaining its momentum. For risk-averse investors or those wary of stretched valuations, it may be prudent to await more attractive entry points or clearer signs of sustained profitability beyond growth metrics.

Ultimately, NBIS is a compelling but complex investment case—promising fast growth amid significant risks. Staying informed on quarterly earnings, capacity expansion progress, industry trends, and valuation shifts will be essential for investors considering NBIS in their portfolios.