Nvidia-Backed AI Stock to Buy Hand Over Fist in 2025: Nebius Group

Nebius Group (NBIS 1.51%) is an under-the-radar AI stock that has the potential to deliver significant returns in 2025. The company, which specializes in AI infrastructure, has received an investment from Nvidia, a leading player in the AI hardware market. This investment, along with Nebius' strategic focus on cloud-based platforms and GPU clusters, positions the company to capitalize on the growing demand for AI infrastructure in the coming years.

Nebius Group's primary market is AI infrastructure, building GPU clusters and cloud-based platforms. The company's cloud business is a key driver of its growth, with revenue increasing almost threefold quarter over quarter in the third quarter of 2024, reaching an annualized run rate of $120 million. Nebius' management projects that the company's annual recurring revenue (ARR) run rate will reach up to $1 billion by the end of 2025, representing a nearly tenfold increase from current levels. This growth is fueled by the increasing demand for cloud-based AI services, as businesses seek to leverage the scalability and flexibility of cloud platforms to deploy AI models and applications.



Nebius Group's strategic focus on cloud-based platforms and GPU clusters is further validated by the company's partnership with Nvidia, a leading provider of GPUs for AI workloads. Nvidia has invested in Nebius, recognizing the company's potential in the AI infrastructure market. This partnership is expected to help Nebius expand its reach and tap into new opportunities in the AI ecosystem.

Nebius Group's expansion into other areas, such as generative AI, autonomous driving, and technology-based education, contributes to its overall growth and revenue streams. The company's generative AI business focuses on creating AI models that can generate new, synthetic data or content. This technology has applications in various industries, such as content creation, gaming, and data augmentation. As generative AI becomes more prevalent, Nebius' revenue from this segment is expected to grow significantly.

Nebius Group's autonomous driving business, Avride, focuses on developing AI-powered solutions for autonomous vehicles. The global autonomous vehicle market is expected to grow at a CAGR of 39.47% from 2021 to 2028, reaching $556.67 billion by 2028. By expanding into this market, Nebius can tap into this high-growth potential and generate additional revenue streams.

Nebius Group's technology-based education subsidiary, TripleTen, focuses on developing AI-powered educational platforms and tools. The global e-learning market is expected to grow at a CAGR of 14.3% from 2021 to 2028, reaching $325 billion by 2025. By expanding into this market, Nebius can tap into the growing demand for online education and generate additional revenue streams.

In conclusion, Nebius Group is a compelling AI stock to consider in 2025. The company's strategic focus on cloud-based platforms and GPU clusters, along with its partnership with Nvidia, positions it to capitalize on the growing demand for AI infrastructure. Additionally, Nebius Group's expansion into other areas, such as generative AI, autonomous driving, and technology-based education, contributes to its overall growth and revenue streams. Investors seeking to capitalize on the AI revolution should consider Nebius Group as a potential addition to their portfolios.