Nebius AI: Next NVIDIA or Overhyped Flop?

Alright, let's get one thing straight: every freakin' company remotely connected to AI is being called "the next NVIDIA." Give me a break. Is Nebius Group (NBIS) actually different? Or are we just drinking the Kool-Aid again?

The Neocloud Hype Train

So, Nebius is a "neocloud" provider. Sounds futuristic, right? Basically, they rent out GPU clusters to companies who can't afford, or can't get their hands on, NVIDIA's (NVDA) chips directly. Okay, that's a need. Demand is insane, and NVIDIA can't keep up. Nebius steps in...supposedly saving the day.

But here's the thing: building data centers ain't cheap. Securing those precious NVIDIA GB300 chips? Even more expensive. Nebius is burning cash like a California wildfire – a $508 million net loss in the first nine months of 2025. And they're resorting to "at-the-market offerings" to keep the lights on? That's never a good sign. It's like saying, "Hey, we need more money, and uh, we're not exactly sure where it's coming from."

Goldman Sachs analyst Alexander Duval is still screaming "Buy!" with a $155 price target, claiming Nebius is "one of the best ways to benefit from the boom in AI infrastructure investments." Okay, Duval, easy there. You work for Goldman Sachs. You have to say that.

But is he right? Nebius did land some massive deals – a $17.4 billion contract with Microsoft and another $3 billion with Meta Platforms. That's serious coin. Management is projecting $7 billion to $9 billion in annualized run-rate revenue (ARR) by the end of 2026. If they hit that, NBIS stock might be worth the hype.

The Reality Check

Here's where my cynicism kicks in. Those contracts are HUGE, offcourse, but can Nebius actually deliver? Are they going to be able to scale fast enough to meet the demand without going bankrupt first? The article mentions a forward price-to-sales (P/S) ratio of about 5.5, based on 2027 GAAP revenue. Sounds reasonable...if they hit their targets.

And that's a massive "if." This whole AI infrastructure gold rush reminds me of the dot-com bubble. Everyone's throwing money at anything with "AI" in the name, hoping it'll be the next Amazon or Google. Most of these companies are going to crash and burn. Will Nebius be one of them? I honestly don't know.

Then again, maybe I'm the crazy one here. Maybe Nebius really is the next big thing. But color me skeptical. I need to see some actual profits before I'm convinced.

Speaking of things I need to see... My freakin' internet provider is throttling my bandwidth again. What am I paying them for, exactly? To watch YouTube videos in 240p? It's a scam, I tell you, a complete and utter scam...

CoreWeave and IREN: The Competition

Nebius isn't the only player in this neocloud game. CoreWeave (CRWV) and IREN Limited (IREN) are also vying for a piece of the pie. Wall Street seems split on CoreWeave, with some analysts seeing long-term potential and others highlighting project delays. IREN, apparently, is building its own full infrastructure, which Bernstein analyst Gautam Chhugani thinks is a good thing. He's got an "Outperform" rating and a $125 price target, which represents a 155% upside.

TipRanks says CoreWeave offers the biggest upside of the three, but Nebius is the only one with a "Strong Buy" consensus rating. So, who do you believe? The analysts who are paid to pump stocks? Or your cynical pal Nate, who's just trying to make sense of this mess? According to a recent article on TipRanks, CoreWeave (CRWV), Nebius, IREN Are Rising from the Q3 Fall — Time to Buy?.

Is This All Just a Big Joke?

I ain't gonna lie, this whole situation feels kinda ridiculous. We're betting the future on companies that are losing money hand over fist, based on projections that may or may not come true. It's like building a house on a foundation of hopes and dreams. So, what's the real story?