Nebius Group (NBIS)’s Microsoft Deal Has Impressed Analysts

We recently published 10 Best Strong Buy AI Stocks to Invest In.  Nebius Group N.V. (NASDAQ:NBIS) is one of the best consumer cyclical stocks.

Nebius Group N.V. (NASDAQ:NBIS) is a key stock in the AI ecosystem. It operates in the capacity side of the equation, which includes GPU clusters and cloud platforms. The firm completed its secondary offering in September.

With Nebius Group N.V. (NASDAQ:NBIS) closed at $94.87, Citizens Financial set a $175 price target for the firm on November 19th. The bank also set a Market Outperform rating on the shares and outlined that the rating was based on Nebius Group N.V. (NASDAQ:NBIS)’s deals with Microsoft and Meta. The Microsoft deal is valued at $17.4 billion and is spread out over a five-year term. Its announcement sent the shares 47% higher in September. Citizens added that, along with the Meta deal, the engagements allow Nebius Group N.V. (NASDAQ:NBIS) to become a solid player in the AI ecosystem. Crucially, for Citizens, the two tech giants’ decision to work with the firm meant that Nebius Group N.V. (NASDAQ:NBIS)’s previous ties to the Russian firm Yandex were not concerning when it came to security and protecting sensitive assets.

As for the hedge funds, 65 funds had disclosed holding Nebius Group N.V. (NASDAQ:NBIS) in their third quarter 13F filings. Jericho Capital Asset Management‘s position was notable as it marked a 56% jump.

Nebius Group (NBIS)'s Microsoft Deal Has Impressed Analysts

Source: Pexels

During Nebius Group N.V. (NASDAQ:NBIS)’s third-quarter earnings call, after DA Davidson’s Alex Platt asked management why Meta chose the firm, CEO Arkady Volozh replied:

“Well, again, as we’re happy to announce today, this new deal with Meta is approximately $3 billion. As I said, the size of the deal was limited only by the capacity that we had available, and if we had more capacity, we could have signed a bigger deal, probably. After we announced Microsoft in September, we said that we would have more deals of this kind, more large deals. And actually, we’re delivering on that promise, and we’re optimistic as these deals will arise more and more. However, these mega deals are important, but it’s important to stress that we will remain focused on developing our own AI cloud, which currently serves not only these big deals but AI startups and enterprises. Ultimately, we believe that these large contracts provide us with great sourcing of financing for us to continue building our core AI cloud business.”

While we acknowledge the risk and potential of NBIS as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than NBIS and that has 10,000% upside potential, check out our report about this cheapest AI stock.

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Disclosure: None. This article is originally published at Insider Monkey.