Nebius Group vs. Astera Labs: Which AI Stock Offers a Stronger Long-Term Investment Case?

The artificial intelligence (AI) infrastructure sector is witnessing a fierce competition between two high-growth players: Nebius Group and Astera Labs. While both companies are positioned to benefit from the explosive demand for AI-driven computing, their financial health and valuation metrics tell divergent stories. For investors prioritizing sustainability and value, Astera Labs emerges as the more compelling long-term buy. This analysis examines revenue growth, profitability, debt levels, capital expenditures (CAPEX), and price-to-sales (P/S) ratios to justify this conclusion.

Revenue Growth: Momentum vs. Scalability

Nebius Group has demonstrated extraordinary revenue growth, with a 355% year-over-year increase to $146 million in Q3 2025 according to its financial results. This surge is driven by high-value contracts, including a $3 billion agreement with Meta and a $17.4–$19.4 billion deal with Microsoft. However, such growth is contingent on long-term contract fulfillment, which may not translate into immediate cash flows.

Astera Labs, meanwhile, reported $230.6 million in Q3 2025 revenue, a 104% year-over-year increase. Over the trailing twelve months (TTM), its revenue surged from $116 million in 2023 to $723 million in 2025 according to Macrotrends data. This trajectory reflects scalable demand for its semiconductor-based connectivity solutions, which are critical for AI systems. While Nebius's growth is impressive, Astera's more consistent and diversified revenue streams suggest stronger long-term resilience.

Profitability: Losses vs. Profitability

Nebius Group's financials reveal a stark contrast between top-line growth and bottom-line performance. In Q3 2025, it reported a net loss of $119.6 million and an adjusted net loss of $100.4 million according to its financial results, driven by a 145% year-over-year increase in operating expenses to $276.3 million as reported by Yahoo Finance. Despite a 31.43% net profit margin according to SimplyWall St, this metric appears to reflect non-GAAP adjustments, as the company's operating income was -$539.3 million over the past 12 months.

Astera Labs, by contrast, delivered GAAP net income of $91.1 million in Q3 2025, with a net margin of approximately 40% according to its financial announcement. Its non-GAAP operating margin of 41.7% according to its press release underscores efficient cost management and operational leverage. This profitability, even amid aggressive R&D investments, positions Astera as a more financially disciplined player.

Debt and Liquidity: Capital Intensity vs. Financial Flexibility

Nebius Group's aggressive expansion has come at a steep cost. The company has a debt level of $4.57 billion and consumes approximately $600 million annually in capital. To fund its $5 billion CAPEX plan for 2025, Nebius has resorted to equity offerings, convertible notes, and asset-backed financing. While it holds $4.9 billion in cash according to its investor update, its reliance on continuous capital markets access introduces significant risk.

Astera Labs, however, maintains a debt-free balance sheet, with long-term debt at $0 since at least 2022 according to Macrotrends data. Its CAPEX of $18.9 million in Q3 2025 according to MarketBeat is modest compared to Nebius's $955.5 million in the same period according to The Fool. This financial flexibility allows Astera to allocate capital to innovation without the burden of debt servicing or shareholder dilution.

CAPEX and Valuation: Overbuilding vs. Prudent Investment

Nebius Group's CAPEX strategy is characterized by aggressive overbuilding. It has raised its 2025 CAPEX guidance to $5 billion to secure 220 megawatts of power for GPU deployment according to Yahoo Finance, yet faces capacity and supply chain constraints. This capital intensity, while necessary for scaling AI infrastructure, risks overleveraging the company and delaying returns for investors.

Astera Labs, meanwhile, has focused CAPEX on operational efficiency. Its $3.87 million in 2024 CAPEX according to MarketBeat and $18.9 million in Q3 2025 according to The Fool reflect a measured approach to infrastructure, prioritizing R&D and product development. Valuation metrics further highlight the gap: Nebius trades at a P/S ratio of 66.9x according to SimplyWall St, while Astera's P/S ratio is 34.29–36.49x according to GuruFocus, closer to the Semiconductors industry median of 2.88x according to GuruFocus data. Astera's lower valuation, combined with its profitability, offers a more attractive risk-reward profile.

Conclusion: Sustainability Over Speculation

While Nebius Group's hypergrowth in AI cloud services is undeniably impressive, its financial health is precarious. High debt, massive CAPEX, and unprofitable operations raise concerns about long-term viability. Astera Labs, by contrast, combines profitability, debt-free balance sheets, and prudent capital allocation to deliver sustainable value. For investors seeking a more balanced approach to AI infrastructure-where innovation is paired with financial discipline-Astera Labs is the clear choice.