Nebius Group (NasdaqGS:NBIS) Valuation in Focus After Microsoft and Meta AI Deals Fuel Revenue Surge

Nebius Group (NasdaqGS:NBIS) has caught the attention of investors after inking major AI infrastructure agreements with Microsoft and Meta. The company’s latest earnings show rapid revenue acceleration, which is fueling discussion about future growth possibilities.

See our latest analysis for Nebius Group.

Recent momentum around Nebius Group’s share price has been anything but ordinary, with high-profile deals and striking revenue growth propelling the story forward. Even after some volatility, such as a 29% dip over the past month, the stock’s year-to-date share price return stands at an impressive 173%, while its one-year total shareholder return has soared 254%. This combination of headline partnerships and long-term gains suggests that market conviction is holding firm, despite occasional bumps.

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With Nebius Group’s share price racing ahead, investors are now asking a familiar question: is the current valuation underestimating future upside, or has the recent surge already priced in all the company’s growth potential?

Most Popular Narrative: 49.8% Undervalued

The narrative suggests Nebius Group has a fair value nearly 50% above the recent closing price of $83.26. This implies that the market has not yet priced in the bullish outlook outlined by consensus analysts. Investors will want to examine what is driving this sharp valuation gap compared to today’s trading levels.

“Bullish analysts have raised their price targets following the landmark multi-billion dollar contract Nebius secured with Microsoft, underscoring the company’s distinctive positioning in delivering large-scale dedicated capacity. Strong reliability metrics are regarded as a significant and possibly underappreciated driver behind Nebius selling out much of its available capacity for the upcoming quarters, supporting robust utilization and pricing power.”

Read the complete narrative.

This fair value calculation has a wild card: forecasts rest on staggering growth assumptions and massive profit margin expansion over the next three years. What are the bold projections pushing Nebius Group’s valuation so much higher than its share price? The answer is surprising. Find out how the numbers add up to a potential breakthrough for this high-flying tech company.

Result: Fair Value of $166 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, risks remain, including fierce competition and mounting regulatory pressures. Either of these factors could challenge Nebius Group's growth trajectory and dampen long-term profitability.

Find out about the key risks to this Nebius Group narrative.

Build Your Own Nebius Group Narrative

For those who see a different story in the numbers or want to dig deeper into the underlying data, you can shape your own perspective in just a few minutes. Do it your way.

A great starting point for your Nebius Group research is our analysis highlighting 3 key rewards and 3 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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