Nebius Group N.V. (NBIS) is rapidly expanding its AI cloud infrastructure, projecting a power target increase from 1 gigawatt to 2.5 gigawatts by 2026, amidst soaring demand for AI capabilities. Key contracts with Microsoft and Meta are valued between $17.4 billion and $19.4 billion, and up to $3 billion, respectively, with revenue expected to contribute starting in late 2025. However, the company is raising its capital expenditure outlook from $2 billion to $5 billion for 2025, which increases the operational risks associated with fluctuating AI demand.
Amazon.com, Inc. (AMZN), with its Amazon Web Services (AWS), continues to dominate the AI cloud space through significant investments and a diverse service portfolio, aimed at meeting growing AI workload demands. As of now, both companies are navigating through unique market challenges; while Nebius may suit investors seeking higher volatility and growth, Amazon presents a more stable investment, reflected in its valuation status with a Zacks Rank of #2 (Buy) compared to Nebius at #3 (Hold).
Analyst projections highlight that AI infrastructure spending is anticipated to exceed $758 billion by 2029, favoring both companies but with differing growth trajectories. In the past month, NBIS shares have risen 6.3%, whereas AMZN shares have increased 2.8%, suggesting a competitive landscape for investors in the AI infrastructure sector.
