Last year, shares in small artificial intelligence (AI) stocks called Soundhound AI witnessed an unprecedented rise. Soundhound AI’s voice recognition technology is an exciting pocket in the AI realm, but the main contributor to the company’s ingenious price transfer was associated with strategic investments by Nvidia.
Like financial institutions, companies must report ownership of other companies through 13F filing. According to Nvidia’s latest 13th floor, the company has ended its position in Soundhound AI and invested in a stake in a data center called Nebius Group. (NASDAQ: NBIS).
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If you’re new to Nebius, don’t worry. The company is flying under the radar for a reason, but that may not last very long.
We explore how Nebius plays an important role in the AI revolution and assess why the company’s valuation looks reasonable now.
How did Nebius and Nvidia link?
Nebius was once owned by a Russian internet conglomerate called Yandex. However, after Russia’s invasion of Ukraine, the US and the European Union imposed sanctions on Russia, resulting in several interesting business decisions.
As per Yandex, the company has spun off a non-Russian subsidiary. Nebius is one of them. Following this transaction, Nebius is listed as its own independent public company by Nasdaq Composite.
Shortly after its debut on Nasdaq, Nebius ran a stock funding round, raising $700 million. This is a round nvidia that participated. Therefore, the company’s shares in Nebius became public news and had to be reported on the 13th floor.
Image source: Getty Images.
How does Nevius work with Nvidia?
In September, Nebius announced that he was investing $1 billion in AI infrastructure in Finland and France. As part of the rollout, Nevius will build a data center equipped with clusters of Nvidia hoppers and Blackwell Graphics Processing Units (GPUs).
In addition, the company is also expanding its US influence as it launches a new data center in Kansas City.
The company is starting to make a splash in the US here, and given its close relationship with Nvidia, Nevius integrates more from other ongoing AI infrastructure projects, namely hyperscalers such as Microsoft, Amazon, Amazon, and You wouldn’t be surprised to see it being done. alphabet.
Analysis of Nebius’s assessment
According to the company’s press release on fourth quarter revenue, annual recurring revenue (ARR) reached at least $220 million by the first quarter (March) “already under contract” and “March). Furthermore, Nebius CEO Arkady Volozh told investors that the company’s December ARR target is between $750 million and $1 billion “in reach.” He said he expanded the Blackwell deployment as a major catalyst.
This is where things get a little more interesting. In a recent article, my contributor to football.com Bram Berkowitz thought that Nebius could be considered a competitor to CoreWeave. CoreWeave is still private, but it is rumored that the company will be released at a $35 billion valuation. Reporting CoreWeave’s $202 billion revenues accurate, that means a sale (P/S) multiple from a price of 17.5.
Applying the same ratio to Nebius could suggest a company’s valuation of $13.1 billion to $17.5 billion, depending on where the ARR guidance is located. Considering that the company currently boasts a market capitalization of $10.9 billion, I think it makes sense to say that Nebius’s shares have attractive benefits.
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John Mackey, former CEO of Amazon subsidiary Whole Foods Market, is a member of Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, is a member of the board of directors of Motley Fool. Adam Spatacco has positions for Alphabet, Amazon, Microsoft, and Nvidia. Motley Fool has positions and recommends Alphabet, Amazon, Microsoft, Nebius Group, and Nvidia. Motley Fool recommends the following options: A $395 phone at Microsoft for January 2026 length and a $405 phone to Microsoft for January 2026 short term. Motley Fools have a disclosure policy.
The views and opinions expressed herein are the views and opinions of the authors and are not necessarily Nasdaq, Inc. It does not reflect the opinions of
