After years of struggling under the weight of high leverage, operational disruptions, and growing competition, Nebius Group (NBIS) appears to have turned a corner in 2025.
The turnaround is largely thanks to a focus shift to its core AI and data center business where it holds a significant competitive edge.
In its fiscal second quarter, the AI infrastructure developer reported $105.1 million in revenue, up 625% year-over-year and 106% from Q1. The results put Nebius on track for an annualized revenue run rate of $900 million to $1.1 billion by year-end.
Notably, the company’s core AI infrastructure division achieved positive adjusted earnings, marking a $37.1 million improvement from a year earlier.
Nebius builds its own data centers with custom hardware. This strategy drove heavy upfront cash burn but now appears to be paying off.
In fact, most of its current capacity comes from European sites, with rapid expansion underway in the United States.
According to Capitalist Letters author, what sets Nebius apart is that it operates “some of the most energy-efficient data centers in the world.” By using natural air cooling, the company “drastically cuts costs” on operations.
Its custom servers, built on InfiniBand networking and optimized for Nvidia hardware, are designed to handle machine learning and AI workloads while delivering “a significant cost advantage,” potentially reducing GPU and power consumption costs by as much as 20%, Erkan noted.
Despite strong gains in 2025, some analysts view Nebius stock as undervalued, citing its relatively low institutional ownership.
NBIS stock: more room to run?
Nebius shares have surged since its Q2 earnings release earlier this month. Now trading above $74, the stock is up 70% in the past month, 172% year-to-date, and more than 427% over the past 12 months.
However, as analyst and investor Nate Endicott notes, Nebius’ institutional ownership is around 45%, typical for mid-cap companies but well below the 70%-plus ownership common among large caps.
$NBIS Institutional ownership sits at ~45%. pic.twitter.com/BgdL5DhWJZ
undefined Nate Endicott (@EndicottInvests) August 12, 2025
If the AI growth narrative plays out as bullishly as projected by firms like Bank of America, PwC, and McKinsey, Nebius could grow into a larger force in the data center sector and potentially attract greater institutional interest.
Estimates from these and other institutions suggest AI could add between $6.6 trillion and $15 trillion to the global economy by 2030, driven by productivity gains and the creation of new products and services.
“Once institutions come in, the stock can go vertical,” Erkan said.
9/ Institutional ownership still remains low.
undefined Oguz O. | 𝕏 Capitalist 💸 (@thexcapitalist) August 12, 2025
Institutions currently own just 45% of the float.
This means that we are still early in the game.
Once the institutions come in, the stock can go vertical. pic.twitter.com/6orNOoZeDq
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