Here's Why Nebius Group Nearly Doubled in the First Half of 2025

Billy Duberstein, The Motley Fool

Sat, Jul 12, 2025, 11:00 AM 4 min read

• Nebius is one of the big new AI "neoclouds" backed by Nvidia.

• Like peer CoreWeave, Nebius saw hypergrowth in the first half of 2025.

• Nebius also took a majority stake in a Jeff Bezos-backed AI company.

• 10 stocks we like better than Nebius Group ›

Shares of Nebius Group (NASDAQ: NBIS) nearly doubled in the first half of 2025, rising 99.7% through June 30, according to data from S&P Global Market Intelligence.

Nebius is a "new" version of an old company called Yandex, which had been known as the "Russian Google." After Russia invaded Ukraine in 2022, Yandex divested its Russian assets, reheadquartered in Amsterdam, and then went about using its data center expertise to build a European artificial intelligence (AI) "neocloud" in the vein of CoreWeave (NASDAQ: CRWV). The company relisted on the Nasdaq in August 2024.

Coming into 2025, Nebius therefore looked like a start-up, with lots of cash, in-progress assets, and little revenue; however, the company soon showed explosive growth that led to widespread optimism it would become a major AI winner.

Back in December 2024, Nebius raised $700 million in a private placement led by Nvidia (NASDAQ: NVDA). Thus, like CoreWeave, Nebius became one of the neocloud "horses" upon which Nvidia is betting. As the large cloud-computing providers increasingly turn to their own in-house designed AI chips to save money, Nvidia appears to be backing several top-tier "neoclouds," which likely get a preferred allocation of Nvidia graphics processing units (GPUs).

That early access to the latest Nvidia Blackwell GPUs, along with expertise in running AI GPU infrastructure, gives these companies an advantage. Thus, Nebius and CoreWeave have shown explosive growth as they rent out their infrastructure to hyperscale cloud companies or directly to AI companies such as OpenAI.

As an early-stage tech company, Nebius' stock was highly volatile during the first half of the year, falling hard after the DeepSeek R1 model was released and then again following April 2 "Liberation Day." Yet when all was said and done, Nebius' stock nearly doubled by June 30. That came on the back of strong triple-digit revenue growth, lending credence to Nebius' forward guidance at the beginning of the year.

May was a big month for Nebius, as it reported first-quarter revenue growth of 385% and 684% growth in annualized recurring revenue (ARR), which leapt to $249 million by the end of Q1. And that growth came with margin expansion, as Nebius' operating costs only grew by 96% in the same period. The massive revenue inflection seemed to vindicate Nebius' initial guidance to reach between $750 million and $1 billion in ARR by the end of 2025.