Is Nebius Group (NBIS) the Most Undervalued AI Infrastructure Play in 2025?

The AI infrastructure sector has emerged as one of the most dynamic and capital-intensive industries in 2025, driven by surging demand for generative AI, large language models (LLMs), and enterprise-grade computing solutions. Amid this frenzy, Nebius Group (NBIS) has captured attention as a high-growth player with a controversial valuation profile. This analysis evaluates whether NBIS represents a deep-value opportunity, leveraging its structural growth drivers and competitive positioning in the AI compute landscape.

Valuation Metrics: A Tale of Contradictions

Nebius Group's current valuation metrics appear paradoxical. As of December 2025, the stock trades at a negative P/E ratio of -35.64, reflecting unprofitability but also signaling forward-looking optimism about earnings recovery according to Intellectia's analysis. Its P/B ratio of 4.68 suggests the market values its intangible assets (e.g., AI infrastructure IP, customer contracts) at nearly five times its book value according to Intellectia's analysis. However, the EV/EBITDA ratio of 37.51 starkly contrasts with industry benchmarks. For context, AI infrastructure integrators in Q4 2025 trade at conservative multiples of 12x according to LTSI research, while model builders and core infrastructure providers command 25x–50x EV/EBITDA according to Aventis Advisors. NBIS's 37.51x multiple appears elevated compared to infrastructure peers but modest relative to the most speculative segments of the AI ecosystem.

This discrepancy hints at a valuation disconnect. While NBIS's EV/EBITDA is high for a "traditional" infrastructure play, it aligns with the premium investors are willing to pay for companies positioned to scale rapidly in the AI era. The key question is whether NBIS's growth trajectory justifies this premium.

Structural Growth: A Perfect Storm of Demand and Execution

Nebius Group's Q3 2025 results underscore its explosive growth. Revenue surged to $146 million, a 355% year-over-year increase, with core AI infrastructure revenue grew 400% year-over-year. Its annualized run rate revenue (ARR) reached $551 million in Q3 2025, up 28% quarter-over-quarter. These figures are underpinned by strategic partnerships with hyperscalers like Meta ($3 billion contract) and Microsoft ($17.4–19.4 billion deal) according to MVC Investing analysis, which provide visibility and credibility.

The company's expansion plans are equally aggressive. Nebius raised its 2025 capital expenditure guidance from $2 billion to $5 billion to meet demand, while deploying over 22,000 NVIDIA Blackwell GPUs in U.S. and European data centers. Its balance sheet remains robust, with a $1.68 billion in cash and $6 billion in strategic assets, enabling it to fund growth without diluting shareholders excessively.

Competitive Advantages: Differentiation in a Crowded Market

Nebius's competitive edge lies in its AI-native infrastructure and strategic ecosystem partnerships. The launch of AI Cloud 3.1, integrating NVIDIA Blackwell Ultra hardware, positions it as a leader in high-performance computing. Its AI Studio offering, enhanced with fine-tuning capabilities and open-source model support, targets developers and enterprises seeking scalable solutions.

Geographically, Nebius is expanding sustainably, with a 300 MW facility in New Jersey and a green energy-powered colocation site in Iceland according to company updates. These moves align with global trends toward energy-efficient AI infrastructure, a critical differentiator as regulatory pressures mount.

Undervaluation Thesis: Growth vs. Multiples

Despite its growth, NBIS trades at a discount to intrinsic value. As of late 2025, shares closed at $75.45, significantly below a calculated fair value of $159.29. This gap suggests the market is underestimating the company's ability to monetize its infrastructure. For context, the S&P 500 Technology Index trades at a forward P/E of ~30x according to BlackRock analysis, while AI infrastructure peers like Astera Labs command P/B ratios of 28.95x according to PredictStreet data. NBIS's 4.68x P/B appears undervalued relative to these benchmarks, particularly given its superior revenue growth and hyperscaler contracts.

However, risks persist. The company's adjusted EBITDA loss of $75.5 million in Q4 2024 highlights near-term profitability challenges. Intensifying competition from established players like NVIDIA and cloud giants could pressure margins. Yet, Nebius's focus on AI-specific infrastructure and its 2024 $5 billion capital raise position it to scale efficiently.

Conclusion: A Deep-Value Play in the AI Gold Rush

Nebius Group's valuation metrics may appear lofty at first glance, but they pale in comparison to the stratospheric multiples of AI model builders. Its EV/EBITDA of 37.51x is a 3x premium to infrastructure peers but a 2x discount to the 100x+ multiples seen in the most speculative AI niches according to Aventis Advisors. Given its structural growth drivers-hyperscaler contracts, AI-native infrastructure, and a robust balance sheet-NBIS appears undervalued relative to its growth potential.

For investors seeking exposure to the AI infrastructure boom, NBIS offers a compelling combination of deep value and structural tailwinds. While execution risks remain, the company's ability to scale capacity, innovate in AI-specific solutions, and secure long-term contracts with industry leaders makes it a standout candidate in 2025.