The investing community is beginning to take notice of Nebius Group (NBIS -1.39%). I say that largely based on the almost 150% surge in its share price since mid-April. There’s a reason behind that, though. Nebius has been executing on its plan to grow its revenues to a level that would justify a valuation well above its current one.

The company, which went public in May 2011 under the name Yandex, was originally a Russian search engine company. The stock peaked in late 2021. It now trades as Amsterdam-based Nebius Group more than 40% off that previous high.

Nebius sprouted as the cloud computing arm of Russian e-services giant Yandex. It was formed after Yandex restructured and divested all of its Russian assets in July 2024. It resumed trading on the Nasdaq Stock Exchange under the Nebius name in late October 2024.

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Nvidia believes in Nebius

The stock remains far below its Yandex-era highs since the post-transition business has yet to fully demonstrate its potential for growing revenue. But Nebius management is giving investors a good idea of how to value that expected growth. If its assessment proves accurate, Nebius stock would be a good buy at recent prices.

Nebius’ core business is cloud infrastructure. It’s one of a growing number of hyperscalers supplying the computing power needed in the age of artificial intelligence (AI).

Hyperscalers like Nebius have the massive amounts of data center infrastructure that it takes to supply cloud computing services on a global level. It competes with leading players like Amazon Web Services (AWS), Microsoft Azure, and Alphabet‘s Google Cloud.

While its cloud infrastructure and services segment is Nebius’ core business, the company has four business segments, all in specific areas of the AI ecosystem:

• Nebius (cloud infrastructure): The core business, providing infrastructure from a network of data centers for AI workloads, including large-scale GPU clusters, cloud platforms, and developer tools.

• Toloka: A data partner with a network of human specialists to test and evaluate large language models (LLMs) in generative AI development.

• TripleTen: A technology platform focused on reskilling individuals for tech careers, leveraging AI-driven educational tools.

• Avride: Developing autonomous driving technology for self-driving cars and delivery robots, targeting sectors like ride-hailing, logistics, e-commerce, and food delivery.

Nebius’ work in the AI ecosystem has attracted the attention of AI leader Nvidia. The chipmaker participated in a $700 million private funding round for Nebius late last year. Nvidia also owns more than 1 million shares of Nebius stock.

Why Nebius shares could keep rising

Nebius is leading the way in providing computing capacity from Nvidia’s GB200 Blackwell Superchips to European customers. The GB200 is a key component in the architecture of Nvidia CPU and GPU liquid-cooled server racks, including networking links for AI model inference.

Nebius’ partnership with Nvidia gives the cloud services company the ability to scale at a rate that management says will result in an annualized revenue run rate of between $750 million and $1 billion by the end of 2025. It also expects to reach positive adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) this year.

The upper end of that revenue run rate would give Nebius a price-to-sales (P/S) ratio of about 12.5, even after the stock’s recent surge. That appears to be a reasonable valuation for such a fast-growing tech company. By comparison, fellow cloud AI infrastructure provider CoreWeave sports a P/S ratio of about 15 based on this year’s revenue guidance.

Nebius may now be showing up on some tech investors’ radars, but it still isn’t being valued as richly as it could be. If Nebius does achieve the sales growth management says it’s on track to reach this year, the stock could have more room to run over both the short and long term.