We recently published a list of 10 Best Software Infrastructure Stocks to Buy According to Analysts. In this article, we are going to take a look at where Nebius Group N.V. (NASDAQ:NBIS) stands against other best software infrastructure stocks to buy according to analysts.
Companies today allocate significant resources to various aspects of software infrastructure, including servers and data centers for secure data storage and processing, cloud migration and management for scalable environments, network monitoring and management to ensure stability and security, and communication software. Additionally, software delivery and deployment solutions streamline application deployment, while bug tracking and error handling systems manage and resolve software issues. The increasing demand for cloud computing, digital transformation, and the integration of advanced technologies like artificial intelligence and machine learning are expected to drive substantial growth in the global software infrastructure sector. As organizations continue to prioritize agility, scalability, and efficiency, the software infrastructure market is projected to expand rapidly.
According to a January 2025 report by The Business Research Company, the infrastructure software market size is projected to grow from $210 billion in 2024 to $220 billion in 2025, with a growth rate of 5.1%. The market has experienced strong growth in recent years due to spending on legacy system modernization, the increase in remote work, cybersecurity concerns, automation, and application performance optimization. The research firm anticipates continued strong growth, with the market expected to reach around $283 billion by 2029, at a compounded annual growth rate (CAGR) of 6.5%.
Major players in the sector will continue to play a significant role by investing heavily in enhancing their offerings to capture market share. These companies are focusing on developing innovative solutions that leverage AI and automation to improve operational efficiency and enhance the user experience.
Cantor Fitzgerald analyst Thomas Blakey recently initiated coverage of 18 names in infrastructure and artificial intelligence software. In a research note to investors, he highlighted the growing importance of infrastructure software due to the ongoing secular expansion of AI and generative AI. These developments drive the demand for unified, secure, and highly integrated data systems, observable infrastructure, real-time computing and networking capabilities, and enhanced workflows and collaboration. Additionally, the analyst expects cloud infrastructure platforms to be pivotal in consolidating these functions.
To identify the 10 best software infrastructure stocks, we conducted extensive research to compile a list of fundamentally strong U.S. listed software infrastructure companies with a market capitalization of $2 billion and above. We then ranked the stocks in ascending order of their potential upside, with the stock having highest upside ranked at the top.
Note: All pricing data is as of market close on February 7.
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Is Nebius Group (NBIS) the Best Software Infrastructure Stock to Buy According to Analysts?
A close-up of a businesswoman using a laptop, being illuminated by the AI-enabled cloud interface sponsored by the company.
Upside Potential: 102%
Nebius Group N.V. (NASDAQ:NBIS) provides infrastructure and services to AI builders globally through its AI-centric cloud platform, Nebius AI. This platform offers full-stack infrastructure, including large-scale GPU clusters, cloud services, and developer tools. The company also operates Toloka, a data partner for generative AI development stages; TripleTen, an edtech platform for reskilling individuals for tech careers; and Avride, which develops autonomous driving technology for self-driving cars and delivery robots.
Previously known as Yandex, the company was suspended from trading in 2022 after Russia’s invasion of Ukraine. It rebranded to Nebius Group (NASDAQ:NBIS) in October 2024 after divesting its Russian assets. As of September 30, 2024, the company had an annualized run-rate revenue of $120 million, with expectations to reach $170 million to $190 million by the end of 2024.
In early December 2024, Nebius Group (NASDAQ:NBIS) raised approximately $700 million through a private placement financing from institutional and accredited investors, including Accel, NVIDIA, and Orbis Investments. The funds will be used to expand its full-stack AI infrastructure.
Citron Research recently released their bull thesis on the stock (Read the full report by Citron) and said that investor can’t afford to overlook stock’s new narrative. The report states:
“Citron believes that the current opportunity to buy Nebius stock is unique, with Wall Street analysts yet to initiate coverage on the company. As Nebius continues to ramp up its operations, including further capital raises, we expect analyst attention to increase, which will likely drive the stock price higher. Nebius is projected to generate nearly $1 billion in revenue by 2025, largely driven by its data center infrastructure. This business is growing rapidly, and the recent $700 million capital raise from Nvidia and Accel Partners provides a strong financial foundation for Nebius’ future growth.”
Overall, NBIS ranks 2nd on our list of best software infrastructure stocks to buy according to analysts. While we acknowledge the potential of NBIS to grow, our conviction lies in the belief that 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 but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
