Forget Nebius Group Stock: This Quiet AI Leader Looks Like the Smarter Buy Today

Neocloud provider Nebius Group ( NBIS 3.43%) has been one of the hottest stocks on the market in 2025, rising by an incredible 223% year to date. That terrific surge was a result of the rapidly growing demand for artificial intelligence (AI) data center infrastructure, which is outpacing supply by a large margin. The good part is that shares of Nebius look to have more upside to offer in the coming year, according to Wall Street analysts. However, the stock has experienced a significant pullback in the past couple of months. Let's see why that has been the case. Image source: Getty Images. Concerns about debt-fueled AI infrastructure spending are weighing down Nebius stock Nebius has shed about a third of its value since hitting a 52-week high on Oct. 10. That may seem surprising considering the incredible pace at which it's growing: In the first nine months of 2025, revenue shot up by 437% to $302 million. It also has a massive backlog that should allow it to sustain its momentum. NASDAQ: NBIS Key Data Points It is worth noting that Nebius has rented out all of its available data center capacity. It expects to increase its connected data center power capacity to a range of 800 megawatts (MW) to 1 gigawatt (GW) by the end of next year -- a significant jump from its current capacity of 220 MW. This aggressive expansion plan should help Nebius convert a sizable chunk of its $20 billion-plus backlog into revenue next year and over the longer run. However, the stock may still be prone to significant volatility for a couple of reasons. First, it's trading at an expensive premium of 64 times sales. For comparison, the tech-heavy Nasdaq Composite index's price-to-sales ratio is just 5.5. Of course, Nebius has a big enough backlog that it could eventually grow its top line by enough to justify its current share price, but to do that, it will need to secure the funding to bring more capacity online. This brings us to the second reason why Nebius appears to be a risky investment at present. The company was sitting on $4.8 billion in cash at the end of the previous quarter, while its debt stood at $4.6 billion. To support its data center buildout plans, it's going to need considerably more money. Constructing a 1 GW data center costs an estimated $10 billion, plus another $20 billion to $30 billion for the chips to power it. Nebius management says that it "will utilize at least three sources of financing: corporate debt, asset-backed financing, and equity" to meet its funding requirements for the next couple of years. As such, Nebius investors should expect to face share dilution . Meanwhile, the company will carry a higher debt load and take on the increased interest expenses that come with it. These factors are likely to weigh on the stock price, especially considering that investors are already growing more concerned about the viability of debt-fueled AI infrastructure financing....

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