Meta's Plans to Compete in Cloud Computing Market Impact Neocloud Providers
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1 day ago
0mins
Source: Fool
- Stock Price Volatility: Following news of Meta's plans to enter the cloud computing market, CoreWeave's stock plummeted nearly 14% in a single day, while Nebius dropped 17%, reflecting market concerns about the future prospects of both companies, especially with Meta as a customer.
- Massive Contract Expansion: CoreWeave expanded its agreement with Meta in April 2023 to provide cloud computing capacity through 2032, valued at $21 billion, while Nebius announced in March it would provide $12 billion in cloud capacity, showcasing the strong collaborative potential in the AI data center sector.
- Sustained Demand Growth: Despite the competitive threat from Meta, demand for AI data centers from CoreWeave and Nebius remains robust, with CoreWeave noting that its 2026 capacity is largely sold out and 30% of its $99.4 billion revenue backlog comes from foundational AI labs, indicating urgent market demand for their services.
- Investment Opportunity Emerges: Although Meta's plans could impact CoreWeave and Nebius, the demand for AI data centers far exceeds supply, making the current stock price pullback a buying opportunity, particularly as CoreWeave's price-to-sales ratio is only 6.6, indicating potential investment value.
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Analyst Views on NBIS
Wall Street analysts forecast NBIS stock price to fall
5 Analyst Rating
5 Buy
0 Hold
0 Sell
Strong Buy
Current: 213.020
Low
130.00
Averages
164.20
High
211.00
Current: 213.020
Low
130.00
Averages
164.20
High
211.00
About NBIS
Nebius Group NV is a Netherlands-based infrastructure company operating in the technology industry. The Company is engaged in developing a portfolio of artificial intelligence-related technology assets. It is involved in creating an artificial intelligence-centric player to integrate the essential elements of artificial intelligence development with infrastructure, data and advisory globally. It offers products and services such as a cloud platform for artificial intelligence-related workloads, development team services for autonomous vehicles, development of generative artificial intelligence. Nebius builds full-stack infrastructure to service the growth of the global AI industry, including GPU clusters, cloud platforms and tools and services for developers. Company is developing three other businesses that operate under their own brands: Toloka AI, TripleTen and Avride.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Enterprise-Level Security: Running on Nebius AI Cloud, Saturn Cloud offers enterprise-grade security features, including Single Sign-On (SSO), Role-Based Access Control (RBAC), and SOC 2 compliance, ensuring the safety and compliance of customer data.
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See More
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- Self-Service Advantage: Saturn Cloud's platform is now available for self-service deployment in the Nebius marketplace, allowing customers to quickly set up on NVIDIA infrastructure, significantly reducing the complexity of manual integration and accelerating the AI model deployment process.
- Efficient Workflow: Customers can upload datasets, fine-tune models, deploy them, and put them into production through the Nebius marketplace, with Saturn Cloud's managed workflow layer enabling teams to standardize operations and enhance overall efficiency.
- Enterprise-Level Security: Running on Nebius AI Cloud, Saturn Cloud offers enterprise-grade security features, including Single Sign-On (SSO), Role-Based Access Control (RBAC), and SOC 2 compliance, ensuring the safety and compliance of customer data.
- Market Expansion Potential: As an NVIDIA partner, Nebius provides validated infrastructure that offers large-scale GPU capacity for Saturn Cloud customers, further enhancing its competitiveness in the global AI market.
See More
Optimistic Outlook for AI Investments
- Micron's Growth Potential: Micron Technology (MU) has seen its stock triple this year, and with the memory chip market expected to remain tight through 2027, the company is poised for unprecedented growth, presenting significant return opportunities.
- Nebius Revenue Surge: Nebius (NBIS) reported a staggering 684% revenue growth in Q1, with analysts projecting 459% growth in Q2, making it an opportune time to invest as the company rapidly expands into an AI computing giant.
- Nvidia's Market Dominance: Nvidia (NVDA) remains the top AI stock pick since 2023, despite a 17% drop from its all-time highs; its GPUs are still essential to the industry, indicating substantial future growth potential.
- Investment Opportunities in Microsoft and Meta: Microsoft (MSFT) boasts a 27% stake in OpenAI and an annual recurring revenue of $37 billion, showcasing strong growth potential, while Meta (META) trades at an attractive 18 times forward earnings, positioning it as a potential top AI stock in the latter half of 2026.
See More
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- Micron's Growth Potential: Micron Technology (NASDAQ: MU) has seen its stock triple this year, with expectations of a tight memory chip market continuing through 2027, enabling unprecedented growth; currently trading at a P/E of 13.6, investors could secure substantial returns.
- Nebius Cloud Computing Surge: Nebius (NASDAQ: NBIS) reported a staggering 684% revenue growth in Q1, with 459% anticipated in Q2, and projected growth of 544% and 234% for 2026 and 2027 respectively, highlighting its rapid expansion in AI-first cloud computing.
- Nvidia's Investment Opportunity: Nvidia (NASDAQ: NVDA), a leader in AI, has seen its stock drop 17% from all-time highs, yet its Q2 revenue is expected to double year-over-year; with a forward P/E of 22, it presents a prime buying opportunity for investors.
- Microsoft and Meta's Value Rebound: Microsoft (NASDAQ: MSFT) has fallen 30% from its peak, but its 27% stake in OpenAI and $37 billion in annual AI revenue growing at 123% indicate strong market positioning; Meta (NASDAQ: META) saw a 33% revenue increase in Q1, trading at a low P/E of 18, making it a compelling AI investment candidate.
See More
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- New Investment Unveiled: TTRF Capital Ltd disclosed in an SEC filing on July 6, 2026, that it established a new position in Nebius Group N.V. valued at $64 million, reflecting strong confidence in the AI infrastructure provider.
- Holding Value Growth: By quarter-end, the valuation of Nebius Group's stake reached $89.2 million, representing 58.8% of TTRF Capital's reported 13F assets, indicating its significance within the firm's investment portfolio.
- Outstanding Market Performance: Nebius Group has outperformed the S&P 500 index by approximately 300 percentage points over the past year, showcasing its robust growth potential in the AI sector and attracting increased investor interest.
- Diversified Business Landscape: Nebius Group meets global demand for GPU computing and AI services through its diversified offerings, including AI cloud platforms, data solutions, and technology education, further solidifying its position in the global AI infrastructure market.
See More
TTRF Capital Acquires Significant Stake in Nebius Group
- Significant Stake: TTRF Capital Ltd acquired 322,931 shares of Nebius Group N.V. for an estimated $64 million, representing 58.8% of its total 13F assets, indicating strong confidence in the company.
- Valuation Increase: By the end of the reporting period, the stake's valuation reached $89.2 million, reflecting the market's recognition of Nebius's importance in the global AI infrastructure sector and solidifying its position in TTRF's tech-heavy portfolio.
- Market Position: Nebius Group, headquartered in Amsterdam with a market capitalization of $51.75 billion, focuses on providing essential computational resources for the global AI industry, highlighting its strategic significance in the rapidly evolving AI market.
- Investment Risk Advisory: While demand for Nebius's services, particularly in GPU capacity, is strong, its lofty $50 billion valuation already incorporates significant future business expectations, prompting investors to carefully consider potential volatility.
See More
Analysis of Growth Potential in Tech Stocks
- Dell's AI Growth: Dell Technologies reported $16.1 billion in revenue from AI-optimized servers in Q1 2027, marking a 757% year-over-year increase that propelled overall revenue growth by 88%, indicating strong momentum in the AI market.
- Robinhood's Diversified Revenue: Robinhood achieved a 15% year-over-year growth rate in Q1, despite a 47% drop in crypto trading revenue; however, other segments like options and equity transaction revenues grew by 8% and 46%, showcasing the resilience and future growth potential of its business.
- Nebius's Contract Growth: Nebius experienced a remarkable 684% year-over-year revenue growth in Q1, primarily driven by $27 billion in long-term contracts signed with Meta Platforms, highlighting robust demand in the AI data center market.
- Trend Towards Profitability: Nebius's revenue growth is accompanied by a relative decrease in operating expenses, with Q1 2026 revenue reaching $399 million while operating expenses rose to only $527 million, indicating a gradual approach towards profitability.
See More
