Goldman Sachs Initiates Coverage of Nebius Group with "Buy" Rating and $68 Price Target

Nebius Group's shares jumped 12% after Goldman Sachs initiated coverage with a "Buy" rating and a $68 price target, implying 39% upside. The investment bank values the AI Neocloud specialist at $10.5 billion and highlighted its full-stack GPU infrastructure rental platform, cost advantages, and proven scalability. Analysts expect new partnerships and technology rollouts to drive further upside.

Nebius Group (NASDAQ:NBIS) saw its shares jump 12% after Goldman Sachs initiated coverage with a "Buy" rating and a $68 price target, implying a 39% upside. The investment bank values the AI Neocloud specialist at $10.5 billion and highlighted its full-stack GPU infrastructure rental platform, cost advantages, and proven scalability.

Goldman Sachs analyst Alex Duval praised Nebius' position as a leading provider of AI infrastructure, forecasting a 50% upside from current levels. The company operates in the AI Neocloud market, offering outsourced access to GPU computing power via the cloud. Duval noted that Nebius' key advantages include a full-stack software offering, cost efficiencies, and the ability to operate at scale, positioning it to serve the increasing number of enterprise and developer clients seeking access to AI compute without investing in their own hardware [1].

Nebius' competitive edge lies in its vertically integrated model, which includes hardware procurement, data center construction, and software development. This allows the company to control costs and scale rapidly, a critical advantage in a market where price competitiveness is paramount. The firm's full-stack software layer optimizes GPU utilization, reducing compute costs for clients—a critical advantage in a market where price competitiveness is paramount [3].

Goldman Sachs sees a favorable risk/reward skew for investors, estimating a 4:1 upside-to-downside ratio between bull and bear scenarios. The investment bank also noted that Nebius is currently trading at 3x EV/Sales, well below its closest peer CoreWeave, which trades at 5x. This discrepancy reflects Nebius' underappreciated growth potential [1].

The investment bank identified a clear path to growth catalysts, including potential capital raises, expanded infrastructure capacity, and global market entry. These factors could further support revenue growth and valuation upside. Despite recent share price gains, Goldman Sachs maintains that Nebius remains attractively priced relative to peers, particularly given its role as a pure-play in AI compute infrastructure [1].

Goldman Sachs expects a "supportive catalyst path" over the next 12 months to drive further outperformance for the stock. The firm noted that Nebius has recently launched the first NVIDIA (NASDAQ:NVDA) GB200 Grace Blackwell Superchip capacity in Europe, expanding its AI infrastructure offerings. This move marks a significant step in integrating NVIDIA’s accelerated computing platform into Nebius’s AI Cloud [2].

Nebius has also partnered with Saturn Cloud to provide a turnkey AI/ML infrastructure solution, leveraging NVIDIA Hopper GPUs. This partnership aims to offer cost-effective AI capabilities to enterprises and individual users. Meanwhile, Sono Group has announced an extension to the maturity dates for its convertible debentures in an agreement with Yorkville, highlighting ongoing strategic moves by both Nebius Group and Sono Group [2].

Despite the positives, challenges remain. Nebius reported a negative EBITDA for 2025 and raised its capital expenditure guidance to $2 billion, signaling the need for ongoing funding. Additionally, geopolitical risks could disrupt its supply chain. Retail sentiment on platforms like Stocktwits remains neutral, though the stock's 60% year-to-date gain suggests some investor optimism is already priced in [3].

The bottom line is that Goldman Sachs' 4:1 upside-to-downside ratio underscores its belief that Nebius' risks are manageable given its $10.5 billion market cap and fortress-like cash position. The $68 price target implies a 54% premium to current levels, aligning with the firm's view that Nebius is undervalued relative to peers [3].

References:
[1] https://finance.yahoo.com/news/goldman-sachs-starts-nebius-buy-100946163.html
[2] https://www.investing.com/news/analyst-ratings/goldman-sachs-initiates-nebius-group-stock-with-buy-rating-68-target-93CH-4132970
[3] https://www.ainvest.com/news/nebius-group-buy-ai-neocloud-race-goldman-sachs-sees-54-upside-2507/