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Key Points
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Anticipated deregulation and advancements in artificial intelligence (AI) have significantly increased valuations, yet selective investment opportunities persist.
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Nebius Group (NASDAQ: NBIS) reported 385% year-over-year revenue growth and is on track for $1 billion in annual recurring revenue.
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Rocket Lab (NASDAQ: RKLB) has transitioned from a launch provider to a diversified space infrastructure company, supporting elevated valuations.
Growth stocks are rebounding, fueled by expected deregulation and AI breakthroughs, leading to soaring valuations. Although bargains seem scarce, Nebius Group and Rocket Lab stand out as compelling investment opportunities despite high price tags.
Nebius Group Surges
Nebius Group trades at over 70 times trailing sales, but its rapid growth—recording 385% revenue increase in Q1 2025—lowers its forward valuation to under 25 times. The company reached $310 million in annual recurring revenue as of April, with projections between $750 million to $1 billion by year’s end. Furthermore, Nebius plans to build a facility in Kansas City housing 35,000 Nvidia GPUs to meet AI demand.
Rocket Lab’s Transformation
Rocket Lab’s revenue in Q1 2025 was $123 million, a 32% year-over-year increase, with over 50% derived from spacecraft systems rather than launches, enhancing profitability. Selected for the U.S. Space Force’s $5.6 billion National Security Space Launch program, the company is positioned for significant multi-year revenue opportunities amidst rising satellite demand and defence frameworks.
Both companies illustrate how tech-driven industries, specifically AI and aerospace, challenge traditional valuation metrics while capturing substantial growth potential.
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