Nebius, a data center technology company, has reported a promising start to its financial year, achieving an annual recurring revenue (ARR) run rate of $249 million by the end of the first quarter. While this figure is modest in comparison to the multibillion-dollar revenues of competitors, Nebius anticipates significant growth, projecting its ARR to soar between $750 million and $1 billion by the end of 2023.
Positioned as a key player in the neocloud market, Nebius provides AI infrastructure as a service, akin to Amazon Web Services (AWS). The company has a robust infrastructure with data centers located in key regions including New Jersey, Kansas City, and internationally in places like Iceland and Israel. Nebius employs Nvidia GPU architectures to power its services, facilitating scalable applications for businesses.
As a relatively new entity, having emerged from a spinoff of Russian internet firm Yandex, Nebius has garnered attention despite being initially overlooked during its public listing on the Nasdaq. The company recently completed a $700 million private placement, signaling strong interest from industry leaders such as Nvidia.
The company’s diverse offerings extend beyond data centers. Nebius operates subsidiaries such as Avride, which focuses on autonomous vehicles and delivery robots, and Toloka, a data-labeling platform serving major clients like Anthropic, Amazon, and Microsoft. Additionally, TripleTen, another subsidiary, offers online boot camps in fields like data science and cybersecurity.
Despite the fluctuations in Nebius’ stock price earlier in the year, prompted by broader market conditions, analysts are now taking a more positive view. A recent analysis by Goldman Sachs placed a “buy” rating on Nebius, projecting a price target of $68—an indication of potential growth.
Overall, Nebius stands out not only through its technological advancements but also by drawing parallels to the growth trajectories of established companies like Amazon. As the company continues to expand its technological and service offerings, it seems well-positioned for future success in the burgeoning AI infrastructure market.
The long-term potential for Nebius appears bright, and its innovative approach to integrating AI across various sectors could lead to substantial growth, attracting further investment and interest.