AI stocks 2025: While tech giants like Nvidia and Palantir Technologies continue to make headlines in the booming artificial intelligence (AI) industry, a much smaller player has quietly outperformed them both in 2025 and by a wide margin.
Nebius Group Stock Surges 136% in 2025, Beating Nvidia and Palantir
Nebius Group (NASDAQ: NBIS), a Dutch company focused on AI-driven data centers, has seen its stock soar 136% so far this year, as per a report. That’s well ahead of Nvidia’s 24% gain and Palantir’s 102% rise, making Nebius one of the top-performing AI stocks on the market right now, as per The Motley Fool report.
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How Nebius Is Powering AI Growth Through Cloud Infrastructure
Nebius operates in the fast-growing cloud infrastructure-as-a-service (IaaS) market. It provides a scalable cloud computing platform powered by Nvidia GPUs that customers can rent to run AI workloads, as per The Motley Fool. It also offers a platform called AI Studio, which gives users access to multiple large language models (LLMs) to build AI applications and run inference on its data center network, according to the report.
Due to the surging demand for this service, Nebius’ revenue jumped 545% in the first half of 2025, reaching $156 million, reported The Motley Fool. During its August earnings call, the company said it had sold out all of its capacity using Nvidia’s previous generation Hopper GPUs and has now begun offering Nvidia’s latest Blackwell systems via its data centers, as per the report.
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Nebius Ramps Up Data Center Capacity
To keep up with demand, Nebius is rapidly adding data center capacity. The firm expects to reach 220 megawatts (MW) of connected capacity by the end of this year to deploy more GPUs, as per The Motley Fool report. Looking further ahead, the company projects having more than 1 gigawatt (GW) of contracted capacity by the end of 2026, as per the report.This kind of expansion matters. In the cloud AI infrastructure business, revenue potential is directly tied to how much data center capacity a company can offer, according to The Motley Fool.
Nebius Raises Revenue Outlook For 2025
Because of this momentum, Nebius raised its annualized run-rate revenue (ARR) forecast to a midpoint of $1 billion for 2025, up from its earlier guidance of $875 million, as per The Motley Fool. ARR is calculated by multiplying revenue in the last month of a quarter by 12, according to the report.
Software and Services Are Boosting Nebius’ Margins
While its revenue has skyrocketed, Nebius is keeping its losses in check. In the most recent quarter, its adjusted net loss rose just 38% year over year, far below the pace of revenue growth, as per The Motley Fool report. That’s a sign the company is moving closer to potential profitability.
The main reason for its performance is strong margins from its software and services, reported The Motley Fool.
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CFO Breaks Down GPU Pricing and Return on Investment
On the earnings call, CFO Dado Alonso explained the company’s pricing approach, saying, “When we price our GPUs, we aim for healthy margins on a per hour compute basis,” adding, “For the Hopper generation, we expect to break even in roughly 2 to 3 years on a gross profit level. That includes both the cost of hardware, but also the associated operational expenses,” as quoted in the report. Alonso also said, “This estimate doesn’t factor in our higher-margin software and services revenue. As those scale, we see potential to shorten the return on invested capital,” as quoted by The Motley Fool.
Could Nebius Be the Next Big AI Stock?
Nebius may not yet have the name recognition of Nvidia or Palantir, but its results in 2025 have put it firmly on investors’ radar. With soaring demand, a clear strategy for expansion, and improving margins, it’s showing that it has the potential to outperform some of the biggest names in the industry.
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FAQs
Why is Nebius stock up 136% in 2025?
The stock soared due to a 545% surge in revenue, rising demand for its AI infrastructure, and expanded data center capacity.
How does Nebius compare to Nvidia and Palantir?
In 2025, Nebius outperformed both, with Nvidia up 24% and Palantir up 102%, compared to Nebius’ 136% rise.