Discover the Artificial Intelligence action (IA) that is outperforming Gate and Palantir in the market.

October 13, 2025 — 8:12 pm CEST

Written by Carlos Rodríguez for The Intelligent Investor

Key Points

• Gate and Palantir are leading AI stocks in the market, but this little-known AI company outperformed them in 2025.
• Customers are rushing to rent the GPU-powered cloud infrastructure of this company to run their AI workloads.
• The significant revenue growth that this company is likely to achieve could drive its stock prices up in the future.

Gate and Palantir Technologies are among the leading companies in their respective niches in the artificial intelligence industry (AI), one excelling in the hardware space and the other with its innovative software platform. Both companies report strong growth in their revenue and profits as customers flock to acquire their hardware and software solutions. However, these AI stocks have been overshadowed by a much smaller company in the market so far in 2025.

Nebius Group (NASDAQ: NBIS), a Dutch company specializing in AI-focused data centers, saw its stock soar a surprising 136% so far this year. This surpasses the comparable gains of 24% recorded by Gate and the 102% increase achieved by Palantir.

The extraordinary growth of Nebius has propelled its dizzying rally this year

Nebius operates in the rapidly growing Infrastructure as a Service (IaaS) market. This market has experienced massive growth in recent years as organizations seek access to data center capacity to train AI models and run applications in the cloud.

Nebius offers a scalable cloud computing platform powered by (GPU) that can be rented on demand by customers to run AI workloads. Additionally, Nebius's AI Studio platform provides customers access to multiple large language models (LLM) to create AI applications and perform inferences in its data center network.

The demand for these services is so strong that Nebius's revenue in the first half of 2025 increased by an astonishing 545% to 156 million dollars. Management commented at the company's August earnings conference that it sold all of its previous generation GPU capacity. Now, the company is offering next-generation systems through its data centers.

It is important to highlight that Nebius focuses on adding more data center capacity to meet the enormous demand for cloud infrastructure for AI. Nebius expects to have 220 megawatts (MW) of data center capacity available by the end of the year to implement more GPUs. The goal for 2026 is even more ambitious, as the company projects to have over 1 gigawatt (GW) of contracted data center capacity available by the end of next year.

Investors must keep in mind that the cloud infrastructure business for AI is a capacity game. The more capacity a provider can offer to customers, the more revenue it can generate. This is why Nebius has raised its annualized revenue guidance (ARR) to a midpoint of $1 billion for 2025 from its previous expectation of $875 million. Nebius calculates its ARR by multiplying its revenue in the last month of the quarter by 12. That forecast could increase further as Nebius adds more capacity.

Another important aspect to consider is that Nebius's adjusted net loss increased by only 38% year-on-year in the previous quarter, which was far less than the increase in its revenue. This bodes well for the company's bottom line performance in the future. One of the reasons it was able to achieve this last quarter is its ability to generate strong margins from its software and services offerings.

In the recent Nebius earnings conference, CFO Dado Alonso commented:

Look, when we set the price of our GPUs, we aim for healthy margins per hour of computation. For the current generation, we expect to reach break-even in about 2 to 3 years at the gross profit level. This includes both the cost of hardware and associated operating expenses. This estimate does not take into account our higher-margin software and services revenue. As these increase, we see the potential to shorten the return on capital investment.

Therefore, as Nebius's revenue size increases, the company should be able to gradually move towards profitability. The positive part is that analysts forecast a significant increase in the company's revenue over the next few years.

But is it worth buying the stock right now?

The above chart shows that Nebius's growth is expected to accelerate significantly in the second half of 2025, considering it has generated 156 million dollars in revenue in the first half of the year. Furthermore, the estimate for 2027 tells us that its revenue is on track to multiply by more than 5 in just two years.

Nebius seems capable of effectively achieving such outstanding growth, given its capacity expansion plans. That's why it seems worth buying, even though it is priced at 63 times sales. In fact, Nebius's price-to-sales ratio is much lower than Palantir's ratio of 114, and the former is growing at a much faster rate right now.

Therefore, Nebius's valuation is justified by its phenomenal growth, which can be sustained in the long term thanks to the enormous opportunity in the cloud infrastructure market for AI. This could help the stock maintain its long-term momentum.

Carlos Rodríguez does not have a position in any of the mentioned stocks. The Intelligent Investor has positions in Gate and Palantir Technologies. The Intelligent Investor recommends Nebius Group. The Intelligent Investor has a disclosure policy.