Nebius Competes with Hyperscalers in AI Computing Services

D.A. Davidson & Co. analyst Alexander Platt has recently started coverage on Nebius Group N.V. (NASDAQ: NBIS), giving the company a Buy rating along with a price target of $50.

Platt emphasizes that Nebius is strategically positioning itself as a viable alternative to major hyperscalers such as Amazon Web Services (AWS), Microsoft Azure, and Google Cloud Platform (GCP), which have been known to use rigid pricing structures and face supply limitations to maintain high profit margins.

Although AWS and Azure provide dedicated AI instances, they are often accompanied by cumbersome software layers and additional costs. This market reality has prompted many AI startups and enterprises to seek alternatives like Nebius, which focuses specifically on AI workloads.

Nebius capitalizes on this demand by delivering dedicated AI computing services with a commitment to transparent pricing. Its infrastructure is designed to be scalable, specifically accommodating the needs associated with AI applications.

What sets Nebius apart from traditional hyperscalers is its structural advantage in addressing next-generation AI requirements. The company operates on a vertically integrated model and owns its data centers, giving it better control over its resources.

According to the analyst, while the demand for AI compute services is expected to stabilize, Nebius is uniquely positioned to support long-term AI workloads. As the adoption of AI technologies increases, businesses will require scalable and cost-effective computing solutions, an area where hyperscalers frequently fall short due to high pricing.

Nebius distinguishes itself as a purpose-built provider for ongoing AI infrastructure development. The company's offerings are not merely focused on compute power; they also integrate networking capabilities, workload scheduling, and AI-optimized services, which lead to greater efficiency and scalability for AI-driven enterprises.

Price Performance: As of the latest update, shares of Nebius are trading down 5.8%, priced at $34.14.

Nebius, AI, Computing, Investment, Technology