Nebius Group: 3 Reasons Why It's A Fantastic Long-Term Pick

The AI infrastructure market is entering a new era of hypergrowth, and Nebius Group is positioning itself as a key player in this transformation. Despite facing headwinds such as operational losses and fierce competition, the company’s strategic vision, financial resilience, and execution momentum make it a compelling long-term investment. Below are three compelling reasons why Nebius deserves a place in forward-thinking portfolios.

1. Explosive Revenue Growth and Aggressive ARR Guidance

Nebius has demonstrated extraordinary financial momentum in 2025, with its annual recurring revenue (ARR) surging 73% quarter-over-quarter in Q2 to reach $430 million [1]. This follows a staggering 625% year-over-year revenue increase to $105.1 million in the same period [3]. The company has since raised its 2025 ARR guidance to a range of $900 million to $1.1 billion, reflecting confidence in its ability to capitalize on the AI infrastructure boom [2].

This growth is driven by surging demand for high-performance GPU-based solutions, particularly from enterprise clients seeking to deploy large-scale AI models. According to a report by Yahoo Finance, Nebius’s AI cloud infrastructure is already achieving positive Adjusted EBITDA in its core business, outpacing initial expectations [3]. While the group-level Adjusted EBITDA remains negative due to heavy reinvestment, the trajectory suggests a path to profitability as scale accelerates.

2. Strategic Infrastructure Expansion to Meet AI Demand

To sustain its growth, Nebius is aggressively scaling its global data center footprint. By the end of 2025, the company aims to operate 220 megawatts (MW) of active or GPU-ready power, with new facilities in New Jersey and Finland [3]. This is part of a broader plan to quadruple its global capacity by 2026, reaching 1 gigawatt (GW) of power [2].

This expansion is critical to addressing the insatiable demand for AI compute. As stated by Capacity Media, Nebius is deploying cutting-edge hardware such as NVIDIA’s GB200 NVL72 and HGX B200 clusters, ensuring it remains at the forefront of AI innovation [1]. The company’s focus on EU data centers also aligns with its ambition to become the “European AI cloud,” leveraging regulatory advantages and partnerships with local enterprises [4].

Moreover, Nebius has secured partnerships with industry leaders like Cloudflare, Shopify, and Prosus, while its subsidiary Avride collaborates with Uber, Grubhub, and Hyundai [5]. These relationships not only validate Nebius’s technology but also provide recurring revenue streams to fund further growth.

3. Financial Resilience and Strategic Capital Allocation

Despite a widened adjusted net loss of $91.5 million in Q2 2025 [3], Nebius’s balance sheet remains robust. The company holds $1.68 billion in cash reserves as of Q2 and has raised an additional $1 billion through convertible notes in 2025 [5]. This liquidity positions Nebius to fund its $2 billion in planned 2025 capital expenditures without diluting shareholders excessively [4].

The company’s ability to secure capital at favorable terms underscores investor confidence in its long-term potential. As noted by GrowthShuttle, Nebius’s cost-advantaged infrastructure and early access to NVIDIA’s GPU technology give it a competitive edge over larger hyperscalers like AWS and Azure [3]. While these rivals have deeper pockets, Nebius’s agility and focus on AI-specific solutions allow it to target niche markets with higher margins.

Navigating Challenges with Execution Discipline

Critics may point to Nebius’s operational losses and macroeconomic risks, but the company’s strategy is designed to mitigate these. By prioritizing high-margin AI workloads and leveraging its partnerships with NVIDIA, Nebius can maintain a technological edge. Additionally, its EU-focused expansion reduces exposure to geopolitical risks tied to its Yandex heritage [1].

The key to Nebius’s success will be flawless execution of its infrastructure plans and maintaining pricing power in a market where hyperscalers could drive down margins. However, given its current trajectory and financial flexibility, the risks appear manageable.

Conclusion

Nebius Group is a rare combination of explosive growth, strategic foresight, and financial strength in the AI infrastructure sector. Its ability to scale infrastructure, secure high-profile partnerships, and raise capital at scale positions it as a long-term winner in a market expected to grow exponentially. While challenges remain, the company’s execution so far suggests it is well-equipped to navigate them and emerge as a dominant player.

Source:
[1] Nebius Q2 2025: ARR Rises 73% QoQ, Why We're Still ... [https://mlq.ai/research/nebius-nbis-q2-2025-update/]
[2] Can Nebius Reach $1.1B ARR and $630M Revenue Amid AI ... [https://finance.yahoo.com/news/nebius-reach-1-1b-arr-155400572.html]
[3] Nebius' Q2 Loss Widens Y/Y, Revenues Rise on AI Demand [https://finance.yahoo.com/news/nebius-q2-loss-widens-y-140500925.html]
[4] The Nebius Boys Are Trying to Speedrun the Entire AI Cloud Industry, [https://www.reddit.com/r/wallstreetbets/comments/1ish0v7/the_nebius_boys_are_trying_to_speedrun_the_entire/]
[5] Q2 2025: Nebius AI Cloud updates [https://nebius.com/blog/posts/q2-2025-nebius-ai-cloud-updates]