Nebius Group

Nebius Group

A little background 

If you are previously familiar with Yandex which was considered the google of Russia you would know of  its suspension from being publicly traded on western markets. Following the beginning of the Russia/Ukraine war, Yandex saw a major split where over 1000 software engineers left and executives sold the business for $5.2 billion even with the Russian Kremlin taking 50% of the sale. Yandex proceeded to leave Russia and relocate to Finland where they created Nebius. Nebius Group is owned by the Russian tech oligarch Arkady Volzov, who is a serial investor and founder of Yandex, Comptek, and infiNet. 

What’s Nebius 

Nebius is an AI-focused cloud platform designed for intensive workloads, in a rapidly growing sector driven by the explosion of artificial intelligence. The company’s advanced software and custom-designed hardware includes everything from servers to data racks and data center infrastructure form the backbone of its cloud services. Nebius gives developers the computer power, storage, managed services, and tools necessary to build, train, and deploy AI models at scale. This puts Nebius in direct competition with other cloud giants like CoreWeave, which specializes in similar AI workloads.

Wall street’s Bullish outlook 

Financial giants have made a conspicuous bullish move on Nebius Group. Our analysis of options history for Nebius Group (NASDAQ:NBIS) revealed 9 unusual trades. Delving into the details, we found 55% of traders were bullish, while 44% showed bearish tendencies. Out of all the trades we spotted, 3 were puts, with a value of $155,065, and 6 were calls, valued at $617,470. - Bezinga insights 

Success in a competitive industry

Nebius reported significant growth in its Q3 2024 earnings. Revenue reached $43.3 million, a 1.7x increase from the previous quarter, with its core AI infrastructure business seeing a 2.7x growth quarter-over-quarter and a 6.5x growth YoY. The company attributed much of this success to its expanded customer base and the launch of products like the Nebius AI Studio and a specialized cloud platform for AI. As we are seeing more and more artificial intelligence companies creating rapid success in the near future, it's likely that major corporations will begin to implement AI software into their businesses and software. From Q2 to Q3 Nebius gained ten more fortune 500 clients making that 40 major companies they do business with. 

Our outlook

As of December second Nebius released that they will be conducting a structured equity refinancing of 700 million USD to roll-out a full-stack of AI infrastructure. As well as their refinancing Nebius sits on a massive 5 billion in liquidity gained from the sale of yandex which can be used to create data cluster centers all around the world. As of September 2024 Nebius Group began executing its plan to invest over 1 billion USD in AI infrastructure across Europe by mid-2025. This implementation of infrastructure and the confidence of a Proven and ambitious CEO, as well as Wall Street's bullish outlook, we set a price target of $40 USD by the 2025 Q2 earnings report.