The Future of AI Investment: Two High-Growth Stocks to Watch in 2025
The buzz around artificial intelligence (AI) investment continues to captivate the finance world, but recent developments have stirred up some unexpected waves. Earlier this year, Chinese startup DeepSeek shocked many by announcing that its new R1 large language model (LLM) was built for a mere $6 million, causing a dip in stocks among major AI players. Yet, this revelation left many scratching their heads about the real costs involved in such technology. Despite this, major U.S. tech companies remain resolute, pledging billions towards expanding their AI and data center capabilities in 2025.
Meet Nebius Group: A Rising Star
In this environment of uncertainty, one company that’s catching the eyes of investors is Nebius Group (NASDAQ: NBIS). Originating from the restructuring of Russia’s search engine Yandex — halted following the 2022 invasion of Ukraine — Nebius has emerged as a strong contender within the AI landscape. After a Russian consortium took on its assets, the newly restructured Nebius commenced trading on NASDAQ last October.
Nebius is not just a single focus entity; it encompasses a core AI infrastructure business alongside three other intriguing ventures: Toloka, which deals in AI development data; TripleTen, focusing on educational technology; and Avride, a visionary player in autonomous driving and delivery robots.
Investors have reacted positively, with Nebius seeing a remarkable 67% rise in its stock price year to date. Its financials speak volumes: revenues soared from $11.4 million in Q1 to nearly $38 million in the most recent quarter, culminating in a full year revenue of $117.5 million. CEO Arkady Volozh is optimistic, proclaiming a $1 billion revenue run rate by the end of 2025 is "well within reach."
Furthermore, Nebius’s balance sheet is impressive, closing out the fourth quarter with approximately $2.45 billion in cash and minimal debt, outstripping a quarter of its total market cap of $9.3 billion.
Nvidia: More Than Just a Giant in AI
Nvidia (NASDAQ: NVDA), a titan in AI chips and software, has been observing this landscape closely and recently participated in a $700 million funding round for Nebius. Also, Nvidia’s holdings now feature over 1 million shares of Nebius stock worth around $33 million, indicating a strong belief in Nebius’s growth potential.
Despite its substantial growth, Nvidia’s stock price has remained stagnant over the past few months, presenting a unique opportunity for new investors to hop on board before another potential surge. The tech giant will soon report its fiscal fourth-quarter results on February 26, where implications for future sales growth in its Blackwell architecture and next-gen Rubin AI platform are highly anticipated.
The Bigger Picture: Continued Investment
Worries that capital expenditures in AI infrastructure might be slowing seem unfounded. In fact, major players like Microsoft, Meta Platforms, Amazon, and Alphabet have committed over $300 billion collectively to advancing AI capabilities this year. This activity suggests that the pace of investment in AI will continue to accelerate, contrary to fears prompted by DeepSeek’s announcement.
While some may suggest that the true costs of creating LLMs like DeepSeek’s weren’t fully captured in the $6 million figure, the reality is many significant investments are still being made in AI infrastructure. For instance, the Bank of China recently revealed plans to invest around $137 billion to bolster the AI supply chain.
Why Choose These Stocks?
The investment narrative for Nebius hinges on its ambitious revenue forecasts and stellar cash reserves, while Nvidia’s potential for continued growth spans various sectors, including gaming, automotive, and robotics—mirroring its interest in Nebius. For Nebius, achieving its 2025 revenue target could see it trading at a forward enterprise value-to-sales ratio of less than 7, positioning it as an attractive option for growth-oriented tech investors.
Conclusion: A Call to the Tech-Savvy Investor
As AI technology evolves, so too does the landscape for investors. Companies like Nebius and Nvidia stand ready to capture the market’s attention in 2025.
The AI Buzz Hub team is excited to see where these breakthroughs take us. Want to stay in the loop on all things AI? Subscribe to our newsletter or share this article with your fellow enthusiasts.
