<div id="readability-page-1">When it comes to data center stocks, you may be more familiar with the likes of Vertiv or CoreWeave. Indeed, both of those companies are heavily plugged into the world of artificial intelligence (AI) infrastructure. However, one of my top stock picks for 2025 is an under-the-radar data center player called Nebius Group (NBIS 4.13%). If you're unfamiliar with Nebius, rest easy. With the support of Nvidia and billionaire investor and Amazon founder Jeff Bezos, Nebius has a lot going for it. With earnings right around the corner on May 20, now may be the time to pounce on this emerging AI star. <h2>What is Nebius Group?</h2> Nebius is actually a spinoff from a Russian internet conglomerate called Yandex. Following Yandex's divestiture of the Nebius asset, the company listed on the Nasdaq stock exchange and subsequently raised $700 million through a private placement in which Nvidia participated. Nebius is involved with several different businesses. While its primary focus is outfitting data centers with the latest GPU architecture, the company also operates an AI services business called Toloka -- which recently raised funding from Bezos Expeditions. <div><img src="https://imageproxy.pbkrs.com/https://g.foolcdn.com/image//query-b3A9cmVzaXplJnVybD1odHRwczovL2cuZm9vbGNkbi5jb20vZWRpdG9yaWFsL2ltYWdlcy84MTgxNjYvZ2V0dHlpbWFnZXMtMTgwOTY2MDE0OC0yLmpwZyZ3PTcwMA?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" width="700" height="393" original-src="https://imageproxy.pbkrs.com/https://g.foolcdn.com/image//query-b3A9cmVzaXplJnVybD1odHRwczovL2cuZm9vbGNkbi5jb20vZWRpdG9yaWFsL2ltYWdlcy84MTgxNjYvZ2V0dHlpbWFnZXMtMTgwOTY2MDE0OC0yLmpwZyZ3PTcwMA"/>Image source: Getty Images. </div> <h2>Why the stock could go parabolic</h2> Back in February, Nebius reported financial results for the fourth quarter and full calendar year 2024. During the fourth quarter, the company generated $37.9 million in revenue -- up 466% year over year. The AI infrastructure represented over half of this revenue -- growing by more than 600% annually. While these figures are encouraging, I think the Nebius rocket ship hasn't even taken off yet. Management told investors that annual recurring revenue (ARR) reached $90 million in December. If that figure is uninspiring, don't worry. Per the company's guidance, ARR by the end of the first quarter is expected to be &#34;at least $220 million&#34; -- more than double December's ARR. Moreover, management is forecasting ARR by year-end to be in the range of $750 million to $1 billion. But how exactly is the company going to reach these targets and scale by this magnitude? Well, consider the fact that Nebius is heavily involved in the rollout of Nvidia's latest GPU architecture, dubbed Blackwell, across Europe and the U.S. Furthermore, cloud hyperscalers Microsoft, Alphabet, and Amazon, as well as Meta Platforms, are collectively going to spend upward of $300 billion on capital expenditures (capex) just this year. From a macro perspective, rising AI infrastructure is a positive tailwind for Nebius and has me confident in the company's ability to succeed in the long run. <h2>Is Nebius stock a buy right now?</h2> While Nebius stock is trading below prior highs, recent trends suggest that shares are currently experiencing some momentum. Over the last few days, the capital markets have been roaring -- thanks in large part to positive reactions surrounding new tariff agreements between the U.S. and China. I think Nebius has gotten caught up in broader buying, making right now a little bit of dicey opportunity. <img src="https://imageproxy.pbkrs.com/https://media.ycharts.com/charts/264ecd31408bcb582627133d4e1425c6.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" width="720" height="441" original-src="https://imageproxy.pbkrs.com/https://media.ycharts.com/charts/264ecd31408bcb582627133d4e1425c6.png"/> NBIS data by YCharts. To me, the most important thing to be on the lookout for during the Q1 earnings call next week will whether or not Nebius reaches or exceeds its ARR goal of $220 million. And going off of that, it will be equally important to listen to management's forecasts for the remainder of the year. While I am optimistic that Nebius will produce strong results in Q1, I tend to shy away from investing in momentum stocks. As a long-term investor, I understand that there will be more chances to buy stocks at more reasonable valuations. For these reasons, I think the most prudent strategy will be to dial into the earnings call next week and digest management's comments while assessing the company's financial profile. While the stock could experience a parabolic rise on the backbone of a positive earnings report, my hunch is that these gains will be fleeting -- ultimately providing investors with more optimal entry points to initiate a position. </div>

Nvidia will release its first quarter report for fiscal year 2026 ending April 27, 2025. 

According to analysts surveyed by FactSet, Nvidia's first-quarter revenue is expected to increase 66% year-on-year to $43.3 billion; adjusted earnings per share will increase 44% year-on-year to $0.88. The growth rate of revenue and profits has slowed significantly compared with the same period last year. In the same period last year, Nvidia's revenue increased by 262% year-on-year, and its adjusted earnings per share increased by 461% year-on-year.

Nvidia will release its first quarter report for fiscal year 2026 ending April 27, 2025. According to analysts surveyed by FactSet, Nvidia's first-quarter revenue is expected to increase 66% year-on-year to $43.3 billion; adjusted earnings per share will increase 44% year-on-year to $0.88. The growth rate of revenue and profits has slowed significantly compared with the same period last year. In the same period last year, Nvidia's revenue increased by 262% year-on-year, and its adjusted earnings per share increased by 461% year-on-year.

NVIDIA Financial Results for Q4 Fiscal 2025

NVDA

NBIS

Nebius Group, a data center stock backed by Nvidia and Jeff Bezos, is gaining attention ahead of its earnings report on May 20. The company, a spinoff from Yandex, reported a 466% revenue increase in Q4 2024, with AI infrastructure contributing significantly. Management forecasts annual recurring revenue (ARR) to reach between $750 million and $1 billion by year-end. Despite current momentum in the stock, long-term investors may prefer to wait for more favorable valuations after the earnings call.

- Nebius Group, a spinoff from Yandex, is gaining attention as a data center stock with significant backing from Nvidia and Jeff Bezos.  
- The company reported a 466% revenue increase in Q4 2024, with AI infrastructure contributing over half, and is projecting annual recurring revenue (ARR) to reach between $750 million and $1 billion by year-end.  
- While the stock shows momentum, the upcoming Q1 earnings call will be crucial for assessing its ARR goals and future forecasts, suggesting a cautious approach for long-term investors.

Prediction: This Artificial Intelligence (AI) Data Center Stock -- Backed by Nvidia and Billionaire Jeff Bezos -- Could Go Parabolic After May 20