Latest news with #Neocloud
Forbes
09-07-2025
- Business
- Forbes
After 70% Rally, Is Nebius Stock Still The Top AI Cloud Pick?
CANADA - 2025/03/05: In this photo illustration, the Nebius logo is seen displayed on a smartphone ... More screen. (Photo Illustration by Thomas Fuller/SOPA Images/LightRocket via Getty Images) The Europe-based cloud services provider Nebius (NASDAQ:NBIS) has seen its stock rise by 70% year-to-date, significantly outperforming the overall market. Unlike conventional hyperscalers like Amazon's AWS or Microsoft's Azure that provide a wide range of general-purpose cloud services, Nebius is part of a new category of "Neoclouds" that concentrate on high-performance infrastructure specifically for AI workloads. With the demand for generative AI remaining strong, Nebius is experiencing a surge in demand, reflected in a remarkable 385% year-over-year revenue increase in the first quarter of 2025. Despite the presence of other specialized companies in this arena, Nebius distinguishes itself for several reasons. What Sets Nebius Apart To begin with, the company maintains a close partnership with AI chip giant Nvidia (NASDAQ:NVDA), which produces the most powerful chips and effectively establishes industry benchmarks. Nvidia serves as both a key collaborator and investor, having participated in a $700 million funding round last year while holding over 1 million shares in the company. This relationship may provide Nebius with prioritized access to Nvidia's highly sought-after GPUs, such as the Blackwell super chips, when compared to other cloud service providers. This advantage can be significant in a GPU market where supply is constrained and demand greatly exceeds availability, especially for cutting-edge chips. Another distinguishing factor for Nebius is its vertically integrated model. The company designs its own servers internally, circumventing OEMs and collaborating directly with manufacturers to reduce costs, enhance performance, and rapidly incorporate the latest GPUs. This level of control not only minimizes supply chain reliance but also accelerates deployment timelines. This capability is crucial for keeping pace with the fast-evolving AI development cycles. Additionally, it grants the company an advantage in terms of performance-per-watt compared to its competitors. Nebius also provides straightforward, transparent billing without any lock-in agreements, which appeals to smaller startups and AI-centric enterprises. Buy Nebius Stock? So, is Nebius stock worth purchasing at the current price of approximately $48 per share? The stock is trading at about 8.5 times the estimated FY'26 revenue. In comparison, larger competitor CoreWeave is trading at roughly 7 times FY'26 revenues. However, there are compelling reasons to favor Nebius over CoreWeave at this point in time. First, Nebius's growth prospects appear promising. The company aims for an annualized revenue run rate between $750 million and $1 billion by the end of 2025 and anticipates achieving adjusted EBITDA positivity this year. According to consensus estimates, Nebius's sales are expected to increase by 160% in the upcoming year, outpacing CoreWeave. (CoreWeave: Riding the AI Wave or Flying Too Close to the Sun?) Additionally, Nebius's technological advantages, including its proprietary technology stack, could further differentiate it from competitors. By controlling both hardware and software, Nebius is able to optimize performance for specific AI workloads, providing a long-term competitive edge. Nebius also boasts a robust balance sheet, with nearly $2.5 billion in cash and no debt. This financial strength should enable Nebius to continue expanding its global presence with reduced financial risk. In contrast, CoreWeave carries over $8.5 billion in debt, which could lead to significant interest expenses and might affect profitability in the long run despite its rapid revenue growth. Learn more about Trefis RV strategy that has outperformed its all-cap stocks benchmark (a combination of all three: the S&P 500, S&P mid-cap, and Russell 2000), delivering strong returns for investors. Additionally, if you seek potential upside with a smoother experience than investing in an individual stock like Nebius, contemplate the High Quality portfolio, which has outperformed the S&P and achieved over 91% returns since its inception.
Yahoo
04-06-2025
- Business
- Yahoo
Applied Digital Taps $7 Billion in CoreWeave Leases
Applied Digital (NASDAQ:APLD) surged 42% after striking two 15-year lease agreements with CoreWeave (NASDAQ:CRWV) worth approximately $7 billion in total revenue. Under the deal, Applied will deliver 250 MW of IT power to CoreWeave's Ellendale, North Dakota, AI and HPC data center, with an option to add another 150 MW. The first 100 MW facility is slated for late 2025, the next 150 MW by mid-2026, and a third 150 MW building could launch in 2027part of Ellendale's planned 1 GW capacity. Warning! GuruFocus has detected 8 Warning Signs with APLD. As Applied transitions toward a data-center-focused REIT, CEO Wes Cummins says these long-term leases cement its role as a foundational infrastructure provider for Neocloud innovators like CoreWeave, which rents Nvidia (NVDA)-powered GPU clusters. CoreWeave's stock also climbed nearly 5% on the news. Investors should care because the 15-year, multi-gigawatt lease stream provides Applied Digital with predictable, high-visibility cash flows and validates its pivot to large-scale AI data centers just as demand for GPU-backed cloud services soars. With Ellendale's first building breaking ground next year, markets will watch Applied Digital's progress on that 100 MW deployment and any additional 150 MW commitments that could push Ellendale toward its 1 GW target. This article first appeared on GuruFocus.
Yahoo
02-06-2025
- Business
- Yahoo
Applied Digital Taps $7 Billion in CoreWeave Leases
Applied Digital (NASDAQ:APLD) surged 42% after striking two 15-year lease agreements with CoreWeave (NASDAQ:CRWV) worth approximately $7 billion in total revenue. Under the deal, Applied will deliver 250 MW of IT power to CoreWeave's Ellendale, North Dakota, AI and HPC data center, with an option to add another 150 MW. The first 100 MW facility is slated for late 2025, the next 150 MW by mid-2026, and a third 150 MW building could launch in 2027part of Ellendale's planned 1 GW capacity. Warning! GuruFocus has detected 8 Warning Signs with APLD. As Applied transitions toward a data-center-focused REIT, CEO Wes Cummins says these long-term leases cement its role as a foundational infrastructure provider for Neocloud innovators like CoreWeave, which rents Nvidia (NVDA)-powered GPU clusters. CoreWeave's stock also climbed nearly 5% on the news. Investors should care because the 15-year, multi-gigawatt lease stream provides Applied Digital with predictable, high-visibility cash flows and validates its pivot to large-scale AI data centers just as demand for GPU-backed cloud services soars. With Ellendale's first building breaking ground next year, markets will watch Applied Digital's progress on that 100 MW deployment and any additional 150 MW commitments that could push Ellendale toward its 1 GW target. This article first appeared on GuruFocus. Sign in to access your portfolio
Yahoo
02-06-2025
- Business
- Yahoo
Applied Digital Taps $7 Billion in CoreWeave Leases
Applied Digital (NASDAQ:APLD) surged 42% after striking two 15-year lease agreements with CoreWeave (NASDAQ:CRWV) worth approximately $7 billion in total revenue. Under the deal, Applied will deliver 250 MW of IT power to CoreWeave's Ellendale, North Dakota, AI and HPC data center, with an option to add another 150 MW. The first 100 MW facility is slated for late 2025, the next 150 MW by mid-2026, and a third 150 MW building could launch in 2027part of Ellendale's planned 1 GW capacity. Warning! GuruFocus has detected 8 Warning Signs with APLD. As Applied transitions toward a data-center-focused REIT, CEO Wes Cummins says these long-term leases cement its role as a foundational infrastructure provider for Neocloud innovators like CoreWeave, which rents Nvidia (NVDA)-powered GPU clusters. CoreWeave's stock also climbed nearly 5% on the news. Investors should care because the 15-year, multi-gigawatt lease stream provides Applied Digital with predictable, high-visibility cash flows and validates its pivot to large-scale AI data centers just as demand for GPU-backed cloud services soars. With Ellendale's first building breaking ground next year, markets will watch Applied Digital's progress on that 100 MW deployment and any additional 150 MW commitments that could push Ellendale toward its 1 GW target. This article first appeared on GuruFocus.
India Gazette
05-05-2025
- Business
- India Gazette
Global AI spending to increase by 60% in 2025; share of Microsoft, Amazon, Alphabet & Meta to decrease: UBS
New Delhi [India], May 5 (ANI): Global artificial intelligence (AI) spending is projected to rise significantly in the coming years, with UBS estimating a 60 per cent year-on-year increase in 2025, to USD 360 billion. The momentum is expected to continue in 2026, with a further 33 per cent rise to USD 480 billion. However, the share of spending attributed to the Big 4 tech giants -- Microsoft, Amazon, Alphabet, and Meta -- is anticipated to decline, falling from 58 per cent in 2025 to 52 per cent in 2026. The report said 'we expect global AI spend to increase by 60 per cent y/y in 2025 to reach USD 360bn and 33 per cent in 2026 to reach USD expect the combined share of these companies as a percentage of AI spend to rise from less than 20 per cent in 2023 to more than 40 per cent in 2025'. It also highlighted that this broadening of AI spending across a more diverse set of players is a healthy development for the overall AI theme. A reduced concentration of investment among a few companies could eventually lead to less volatility in the market, the report said. Spending outside the Big 4 is expected to reach a robust USD 150 billion in 2025. A significant portion of this is projected to come from China, which is likely to account for 35 per cent of the total spend outside the Big 4. According to UBS, the rise in China's AI investments is being driven by the success of low-cost models such as DeepSeek, strong government support, and the growing use of AI in consumer-facing applications like e-commerce, social media, and advertising. The report mentioned that the Neocloud providers--companies offering specialized AI-integrated cloud services--are also emerging as a key segment, expected to capture around 25 per cent of the non-Big 4 AI spending in 2025. The remaining spend is likely to come from other hyperscalers and enterprise or sovereign cloud providers, including players such as Oracle and Softbank. While UBS advises investors to continue monitoring guidance from the Big 4, the report emphasizes that other AI-focused companies are now accelerating their investments and are crucial to the ongoing resilience of the sector. (ANI)
