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Nebius Group N.V. (NBIS) is rapidly expanding its AI infrastructure, targeting 2.5 gigawatts of contracted power by 2026, up from a previously projected 1 gigawatt. The company has secured contracts worth $3 billion with Meta and between $17.4 billion and $19.4 billion with Microsoft. By year-end 2025, Nebius expects to deliver $900 million to $1.1 billion in annual recurring revenue. However, macroeconomic challenges and rising operating costs may pose risks, as evidenced by an 87% year-over-year increase in SG&A expenses.
Alphabet Inc. (GOOGL) reported a 33.5% year-over-year increase in Google Cloud revenues for Q3 2025, supported by strategic partnerships and investments in custom hardware. The company anticipates a significant capex between $91 billion and $93 billion for 2025, which may strain margins if AI returns do not materialize. GOOGL’s stock has appreciated by 16.6% over the past month, contrasting with a 24.3% decline in NBIS shares.
Valuation comparisons show that NBIS is trading at a Price/Sales ratio of 65.15, while GOOGL stands at 10.13. Analysts have revised earnings estimates down for NBIS but upward for GOOGL, which currently holds a Zacks Rank #3 (Hold) compared to NBIS’s Zacks Rank #4 (Sell).
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