Nebius Group: A European AI Hope Born from Yandex Assets

Nebius Group is a European AI company born out of Yandex's international assets. Led by Arkady Volozh, its former CEO, Nebius aims to leverage its AI expertise to deliver innovative solutions. With a strong foundation and experienced leadership, Nebius has the potential to become a prominent player in the European AI market.

Nebius Group N.V., a technology company, is a notable player in the European AI market. Originally a part of Yandex's international assets, Nebius was founded in 1989 and rebranded as Nebius Group N.V. in August 2024. The company's headquarters are in Amsterdam, the Netherlands, and it offers full-stack infrastructure solutions for the global AI industry. Nebius provides large-scale GPU clusters, cloud platforms, and tools for developers, along with data partner services like Toloka and educational platforms like TripleTen. Additionally, it is involved in autonomous driving technology through Avride.

The company's growth trajectory is promising. According to Seeking Alpha [2], Nebius reported a surge in quarterly revenue, up 385% year-over-year (YoY) in Q1 2025, driven by strong incremental margins. The company's adjusted EBITDA improved significantly, moving from negative $200MM in Q4 2024 to negative $63MM in Q1 2025. Nebius aims to reach $750MM-$1B in annual recurring revenue (ARR) by the end of 2025, with a projected $210MM in Q4 revenue and an annual revenue of around $500MM.

Nebius's strategic partnerships, particularly with Nvidia, provide a competitive edge. Nvidia holds a stake in Nebius and recognizes it as a "Reference Platform Cloud Partner." This partnership allows Nebius to offer cutting-edge AI-native cloud solutions, targeting both small and medium-sized businesses (SMBs) and enterprises. The company's vertically integrated cloud infrastructure is specifically designed for AI training, differentiating it from legacy cloud providers like Amazon Web Services (AWS), Microsoft Azure, and Google Cloud.

The company's leadership, led by Arkady Volozh, the former CEO of Yandex, is a significant asset. Volozh's experience in building Yandex, which was once the leading search engine in Russia, provides a strong foundation for Nebius. The company's management team, comprising former Yandex employees, is highly aligned with shareholders, with Volozh holding 12.9% of outstanding stock.

Nebius's recent IPO and the subsequent initiation of coverage by Goldman Sachs have contributed to its stock's performance. Goldman Sachs issued a Buy rating and a $68 price target, leading to a 15% surge in shares. The growing institutional coverage is expected to broaden the investor pool and provide positive catalysts for the stock.

Looking ahead, Nebius aims to capture a ~2% market share in the $260B AI cloud infrastructure market by 2030. With projected EBIT margins in the mid-20%s, the company's EBIT potential could reach over $1B by the end of the decade. While the stock remains speculative, Nebius offers a strong capital growth opportunity for aggressive investors at current valuations.

References:
[1] https://finance.yahoo.com/quote/NBIS/
[2] https://seekingalpha.com/article/4803754-nebius-group-europe-great-ai-hope