Nebius Group (NBIS): The Key Catalysts That Could Drive the Next Leg Up

As many of you know, NBIS has been the largest position in my portfolio for several months.

Since its April low, the stock has climbed more than 150%, and I’m very pleased with its performance so far.

That said, despite this impressive rally, I believe the core of my investment thesis has yet to play out — and in my view, this could be just the beginning.

In this article, I’ll highlight what I see as the most important short- to medium-term catalysts for NBIS.

Institutional Coverage

One of the biggest reasons NBIS remains under the radar — even after its recent rally — is a simple but powerful one: limited institutional awareness.

Due to the unconventional route Nebius took to go public, the company currently lacks broad sell-side coverage. It’s barely visible on major financial media platforms, and few Wall Street analysts have given attention to the business. As of today, NBIS is covered only by a handful of small firms: DA Davidson, Northland, Arete Research, and BWS Financial — all of which have issued Buy ratings.

But let’s be real: these aren’t the names that move markets on their own.

That said, the Arete Research initiation earlier this month sparked a notable rally — despite it coming from a relatively niche firm. That reaction showed how little it would take to catalyze meaningful upside. Now imagine what could happen if coverage comes from a major player — think JPMorgan, Goldman Sachs, or Bank of America. The impact could be explosive.

As Nebius continues executing, particularly in building out its infrastructure and ramping up AI-focused workloads, institutional interest is almost inevitable. Once analysts begin to model the company’s ARR and margins trajectory, and understand the scale and capital efficiency of its platform, a rerating is more or less a matter of when, not if.

Bottom line: sell-side coverage is often the first domino that triggers institutional inflows. With NBIS still flying under the radar, this is a major catalyst to watch.

New Jersey Data Center

Another major near-term catalyst for NBIS is the completion of its new 300 MW data center in New Jersey — a project that’s quietly laying the groundwork for what could be a very large contract.

The first phase of this facility is expected to go live by late July or early August. As demand for AI infrastructure continues to explode, capacity — not just quality — is the gating factor for many next-gen contracts. And Nebius has been building for this moment.

This facility will unlock the scale necessary to support high-density workloads and will finally position NBIS to ink a large, multi-year deal with a major AI customer — potentially a LLM developer like OpenAI or Google.

Once again, it’s not a question of if, but when. The moment Nebius has the physical capacity to deliver, it becomes a credible contender for major contracts that require both compute availability and power-dense, low-latency infrastructure.

Just look at CoreWeave. When it began signing longer-duration contracts with blue-chip AI names, its valuation skyrocketed. A similar scenario for NBIS could drive a powerful re-rating.

Why does this matter?

Because these large-scale contracts typically bring:

• Revenue visibility over multiple years

• Utilization guarantees that de-risk infrastructure investments

• External validation that Nebius’ tech and operations are enterprise-grade

In a market where trust and scale are prerequisites for meaningful AI adoption, a high-profile customer would de-risk the story. I believe a large, named contract tied to this New Jersey data center could be one of the most important catalysts for the stock in the back half of 2025.

Avride Funding Round

Nebius’ AI infrastructure story is finally starting to gain traction, but I believe one of the most underappreciated assets within NBIS is its autonomous mobility subsidiary, Avride — and that’s exactly what makes the upcoming funding round such a compelling catalyst.

Avride was spun out from Yandex’s autonomous driving division, which dates back to 2016, representing nearly a decade of accumulated R&D in AI-powered mobility. It’s a capital-efficient operator with a dual-pronged approach: developing both robotaxis and autonomous sidewalk delivery robots on a shared technology stack. That’s a key differentiator — enabling scale and synergy across passenger and logistics use cases.

At present, Avride is:

• Operating hundreds of delivery robots across the U.S. and Japan

• Partnered with major players including Uber Eats, Grubhub, Rakuten, and Hyundai

• On track to deploy 100 robotaxis in the U.S. by year-end 2025

And here’s the kicker: NBIS owns 100% of Avride.

In my view, this business alone could be worth $5B+, based on recent valuations in the autonomous mobility space — even more when compared to certain peers. But currently, there’s virtually no valuation being assigned to Avride within NBIS’ market cap.

That could soon change.

A third-party funding round for Avride is expected in the near term, and it could be the catalyst that forces the market to reprice this hidden gem. A strategic or institutional investment would finally provide an external benchmark for its valuation, and I suspect it’s worth much more than what’s currently reflected in the share price.

Simply put, the market has no idea how to value this part of the business — yet. A well-structured investment round would change that instantly. And given the ongoing investor appetite for scalable, IP-rich autonomy platforms, I believe this could be a major re-rating event for NBIS.

Southeast Asia Expansion

Earlier this year, NBIS officially announced plans to bring its AI infrastructure platform to the region, with Singapore identified as its first strategic hub. This is a big deal — and not just from a geographic diversification standpoint. Singapore is increasingly positioning itself as the AI gateway to Asia, and Nebius appears ready to plug into that ecosystem at exactly the right time.

In the company’s own words:

"Nebius is committed to collaborating with local enterprises, governments, and research institutions to drive the growth of the AI economy. Singapore's favorable location, business-friendly environment, and forward-thinking AI policies give us a good base to grow our network and help support AI adoption. By working with stakeholders across the region, we can unlock new opportunities, accelerate growth, and foster a vibrant tech ecosystem that will drive AI advancements and shape the future of multiple industries."

— Roman Chernin, Chief Business Officer at NBIS

Nebius has already begun actively hiring in Singapore, confirming its intent to scale infrastructure and operations in the region over the near term. As demand for sovereign AI compute rises across Asia, Nebius’ early-mover advantage could pay off in a big way — especially in a market with strong policy alignment and rising enterprise AI adoption.

Beyond Singapore, India and Saudi Arabia are starting to emerge as next-in-line frontier opportunities. While neither has been pointed out by the company, recent industry commentary suggests India could soon come into focus.

According to Sanjeev Verma, CEO of Black Box:

"India-based data center companies are looking to attract neocloud firms such as CoreWeave, Lambda Labs, Crusoe, and Nebius, which offer high-end computing for generative AI training at nearly one-third the cost of hyperscalers like AWS, Google Cloud, and Microsoft Azure. Expansion into India is not a question of if, but when."

Verma also noted that India is actively looking to support the gigawatt-scale build-outs from the new wave of AI-native infrastructure providers.

For now, Singapore is the only confirmed expansion, but the signal is clear: Nebius is positioning itself as a global AI infrastructure platform, and Asia is the next frontier. Any formal announcement around data center developments or anchor clients in these markets could become a catalyst.

ClickHouse IPO

Nebius owns a 28% stake in ClickHouse, a leading open-source database company that originated as an internal project within Yandex. Over time, ClickHouse evolved into a high-growth, independent entity in the DBMS space — one that now stands as a serious competitor to Snowflake and other modern data platforms.

Until recently, this stake was largely ignored by the market. That changed following ClickHouse’s most recent funding round, which valued the company at $6.35B. Based on that valuation, Nebius’ stake is worth approximately $1.8B — a figure that represents a material portion of NBIS’ current market capitalization.

Notably, while the full details of the round haven’t been disclosed, Nebius participated in the funding and therefore is likely to have maintained its ownership position with no dilution.

This is more than just a passive investment. Nebius management has made it clear that it views the ClickHouse stake as a strategic financial lever — one that can be monetized over time to help fund the company’s core AI infrastructure initiatives. Rather than selling today and realizing ~$1–2B in liquidity, leadership has signaled confidence in ClickHouse’s long-term potential, choosing to retain the stake and wait for a larger inflection point.

In my view, there’s a strong possibility that ClickHouse will pursue an IPO within the next 12 to 24 months. Should that occur in favorable market conditions — and at a higher valuation — the implied value of NBIS’ stake could increase substantially. This would provide a powerful, non-dilutive source of capital that Nebius could deploy into high-return infrastructure projects or future international expansion.

The bottom line: most investors are not properly accounting for the embedded optionality of this stake. A successful ClickHouse IPO would not only crystallize the value of this asset but also strengthen the financial flexibility of Nebius at a time when demand for its services is accelerating.

Toloka New Funding Round

In Q2, Nebius took a major step toward unlocking the latent value of one of its most promising assets: Toloka, a crowdsourcing platform that enables businesses to outsource data labeling and other microtasks to a global pool of contributors, helping to train AI models and improve data quality. While the business has quietly grown into a critical enabler of generative AI models, it now appears poised for a new phase of accelerated, independently financed expansion.

In May, Toloka secured a strategic investment round led by Bezos Expeditions, the investment arm of Jeff Bezos, with additional participation from Shopify CTO Mikhail Parakhin. The funding round provides Toloka with both capital and greater operational autonomy, while still allowing Nebius to retain a significant economic interest.

Importantly, although NBIS relinquished majority voting control in the deal, this structure enables Toloka to operate with greater strategic flexibility while still creating meaningful upside for Nebius shareholders — without requiring incremental capital commitments from the parent.

Key highlights from Toloka’s Q1 performance:

• Revenue more than doubled YoY, fueled by expansion with frontier AI labs and enterprise clients.

• All major contracts were renewed, highlighting Toloka’s positioning as a trusted, high-scale data provider.

• Toloka’s customer base now includes Anthropic, Amazon, Microsoft, Shopify, and Recraft — an impressive lineup in the AI ecosystem.

This growth is particularly notable in the context of increasing investor attention on the data labeling space. Recently, Meta invested $14.3B into Scale AI, valuing it at over $29B. While Scale operates at a larger scale with a more curated enterprise focus, the investment underscores a key thematic point: high-quality, scalable data annotation is no longer a commoditized backend service — it’s a strategic component of the AI development stack.

Toloka’s model differs somewhat — it’s built on a more crowdsourced, volume-based infrastructure with a leaner cost base. This may come with lower barriers to entry but allows for scalable delivery at attractive margins. While not yet directly comparable to Scale AI in terms of scale or valuation, Toloka is clearly moving in the right direction, and its recent customer wins lend credibility to its value proposition.

Last month, following the Bezos-led round, Toloka’s CEO publicly hinted at plans for another capital raise — a move that could provide another valuation benchmark and further validate the company's long-term positioning.

In sum, Toloka represents a rapidly emerging asset within the NBIS portfolio — one that is beginning to attract top-tier partners and investors, scale its customer base, and generate meaningful revenue growth. Any future transaction that further benchmarks its valuation could serve as a powerful catalyst for Nebius shareholders.

Europe’s AI Infrastructure Boom

A tectonic shift is underway in Europe’s technology landscape. After years of trailing the United States in high-performance compute infrastructure, the European Union is now making aggressive moves to catch up — driven by a mix of national security, industrial policy, and technological sovereignty concerns.

Recent policy actions and funding commitments across the region signal a massive, coordinated push to localize AI infrastructure and reduce reliance on U.S.-based hyperscalers like AWS, Azure, and Google Cloud. Among the most notable developments:

• The Dutch Parliament has advanced motions to create a national cloud platform, aiming to safeguard data sovereignty and strengthen local compute capabilities.

• There is growing political support for “Buy European” mandates in public sector AI tenders, which could redirect billions in spend to regional providers.

• The European Commission’s €200B InvestAI initiative is aimed at scaling domestic AI capabilities across compute, data, and innovation ecosystems.

• France’s €109B AI roadmap places infrastructure at the center of the country’s long-term strategy for AI leadership.

Nebius is already directly engaged in this build-out.

In partnership with NVIDIA and several national governments, Nebius is part of a major European initiative to deploy NVIDIA Blackwell-based AI infrastructure across the continent. The goal: to 10x Europe’s available compute capacity over the next two years. These deployments are expected to deliver over 3,000 exaflops of Blackwell-powered compute across the region — supporting the development of sovereign AI by enterprises, startups, and public sector organizations.

As Europe’s most energy-efficient and cost-effective AI cloud provider, Nebius — headquartered in the Netherlands — is uniquely positioned to benefit. The company’s regional footprint, government relationships, and low-latency infrastructure make it an ideal partner for national compute initiatives and “Buy European” policies.

Given the scale of the opportunity and the political momentum behind it, I believe Europe could become a multi-billion-dollar TAM for Nebius over the next few years. Any formal announcement of new national deployments, anchor contracts, or additional public-private partnerships would serve as a meaningful near-term catalyst for the stock.

Note: Last week, Nebius announced it will be the first to deliver NVIDIA Blackwell for general availability in Europe — a strong indication of how far ahead it is compared to regional competitors.

Operating Leverage

As with many infrastructure-heavy businesses in their early growth phases, Nebius is currently in a period of elevated capital expenditures, investing aggressively to build out data center capacity, scale its engineering teams, and expand internationally. This front-loaded investment strategy has led to negative near-term cash flows — a point of concern for some investors focused on short-term profitability.

But this is precisely where long-term opportunity lies.

The Nebius model is structurally built for high-margin scalability. Once core infrastructure is in place and utilization ramps, the business is expected to generate significant operating leverage. Management has already outlined mid-term EBIT margin targets of 20–30%, with a long-term potential to exceed 30% margins, putting NBIS in line with elite cloud and infrastructure platforms.

Importantly, the transition is already beginning to show in the numbers. The company has guided to positive adjusted EBITDA in the second half of this year, and with demand scaling rapidly, it is well positioned to reach positive EBIT by 2026.

As more capacity goes live — particularly with the upcoming New Jersey data center — incremental revenue will increasingly flow through to the bottom line. This is the classic operating leverage story: fixed infrastructure costs are already incurred, so each additional customer or contract delivers a higher contribution to profit.

This phase is often the critical turning point — when a high-potential company begins to show financial discipline and margin expansion. Once that inflection becomes clear, institutional interest typically accelerates, and valuation multiples rerate accordingly.

If management executes as expected, current levels could ultimately be viewed as a deeply undervalued entry point, with significant upside as the market begins to price in the long-term margin profile of the business.

Raising Guidance

When Nebius went public in October 2024, management set an ambitious initial goal: to reach $500M-$1B in ARR by the end of 2025. At the time, this wide range reflected both the company’s hyper-growth potential and the early-stage uncertainty surrounding AI infrastructure demand.

Just two months later, following an oversubscribed $700M strategic equity financing — which included marquee investors like NVIDIA — Nebius raised its ARR guidance to $750-$1B. This move not only reflected increased confidence in execution but also highlighted accelerating customer demand and an expanded rollout plan for its full-stack AI infrastructure.

Since then, in both its Q4 2024 and Q1 2025 earnings reports, Nebius has reiterated that guidance, backed by strong underlying performance indicators and rapid growth in contracted capacity.

More recently, the company announced a significant new funding event: it has entered into definitive agreements for a $1B private placement of senior unsecured convertible notes. While details around deployment are still emerging, this capital is expected to be used primarily to expand infrastructure capacity and fuel additional demand-side growth.

In my view, this new funding dramatically increases the likelihood that Nebius not only meets but potentially exceeds its current ARR guidance. While a formal upward revision to guidance is not required for the long-term thesis to remain intact, it could serve as a powerful short-term catalyst — particularly among institutional investors still on the sidelines.

Importantly, a guidance raise would signal further conviction from management, while also confronting lingering skepticism in the market around whether a European-based AI infrastructure company can scale to this level so quickly. In a market that rewards momentum and execution, upward revisions tend to be met with strong positive sentiment, especially in high-growth sectors like AI.

That said, even delivering on the current range would be a major achievement, and a strong validation of Nebius’ infrastructure strategy, customer traction, and leadership team.

Final Thoughts

Despite the stock being up over 150% from its April lows and gaining increasing attention from both retail and institutional circles, I believe the most meaningful catalysts for this company have yet to unfold.

My investment thesis is far from being fully realized, and in my view, the current valuation still offers a compelling risk-reward profile — if management executes on their long-term vision.

While it's already an overweight position in my portfolio and has delivered significant gains, I'm not selling or trimming just yet. The potential upside tied to upcoming developments remains substantial, and I'm willing to stay patient as the story continues to play out.

Disclaimer: As of this writing, M. V. Cunha holds a position in Nebius Group (NBIS) at $25.67/share.

That's it! Thank you so much for reading.

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