Nebius surges 18% after earnings blow past estimates, outperforming CoreWeave and Cloudflare

Nebius Group just reminded Wall Street that the AI infrastructure trade isn’t a two-horse race. The European cloud provider’s stock jumped 18% on May 13 after posting first-quarter revenue of $399 million, a figure that represents roughly an eightfold increase from the same period a year ago.

The numbers behind the rally

Nebius, trading on the Nasdaq under the ticker NBIS, operates large-scale GPU clusters designed specifically for AI computation.

For context, the company is a spin-off from Yandex, the Russian search giant that restructured its international operations. Nebius emerged from that split as a standalone entity focused entirely on AI infrastructure.

Adding fuel to the story: Nvidia disclosed a 9.3% ownership stake in Nebius in July, a vote of confidence from the company whose chips sit at the center of virtually every AI data center on the planet.

How Nebius stacks up against CoreWeave and Cloudflare

The AI cloud infrastructure sector has become one of the market’s most watched battlegrounds. CoreWeave, which trades under CRWV, is Nebius’s closest peer. Both companies are “neocloud” operators, a term describing newer entrants that build GPU-dense data centers purpose-built for AI rather than general-purpose cloud computing.

CoreWeave and Nebius have traded in loose correlation recently, with both stocks exhibiting significant volatility tied to earnings cycles and shifts in AI capital expenditure expectations.

Cloudflare occupies a slightly different lane. Some investors view Cloudflare as a lower-risk alternative for exposure to AI infrastructure growth without the extreme volatility that comes with names like Nebius and CoreWeave.

What’s driving the AI infrastructure boom

Nvidia’s investment in Nebius reflects a broader strategy of the chipmaker backing downstream customers who consume its products in volume. It’s a virtuous cycle: Nvidia sells GPUs to neocloud providers, takes equity stakes in the most promising ones, and benefits as those companies grow their revenue and their chip orders.

The nearly 800% year-over-year revenue growth at Nebius also speaks to how early this market still is. Companies growing at that pace are typically capturing share in a rapidly expanding addressable market rather than stealing customers from competitors.

CoreWeave and Nebius face similar challenges: securing enough GPU supply, managing the capital intensity of data center buildouts, and retaining customers in a market where switching costs aren’t always high.

Hyperscalers like Amazon, Microsoft, and Google continue to invest tens of billions in their own AI infrastructure. Neocloud operators like Nebius are betting they can move faster, offer more specialized services, and capture the segment of demand that the giants can’t or won’t serve efficiently.

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