In 2024, many stocks excelled, but those linked to artificial intelligence (AI) led the way. This technology drove the bull market, with several stocks pushing the S&P 500 to a 27. 5% gain by December 26. Consequently, many popular AI stocks are now quite expensive, as investors anticipate ongoing growth and expanding markets. Finding an AI stock with a reasonable price-to-earnings ratio is unusual today. A recent addition to the Nasdaq, an AI company, might capture Wall Street's interest in 2025—and at a less extreme valuation. Back in Play Nebius Group, an AI infrastructure firm, re-entered the Nasdaq a few months back after a three-year break. Previously owned by Russian company Yandex, Nebius spun off after Yandex sold its international assets for $5. 4 billion amid U. S. sanctions connected to Russia's Ukraine invasion. Based in Amsterdam, Nebius now includes AI segments such as cloud services, data labeling, edtech, and autonomous vehicles, providing AI-as-a-service with GPU clusters and a cloud platform for AI model builders. Building AI internally is costly, yet essential for competitive businesses. For example, Nebius helped ServiceNow enhance their chatbot test tasks from 400 weekly to 3, 000 daily. Nebius gained credibility with a $700 million private financing round, which involved major venture capital firm Accel and AI chip leader Nvidia.

With a special partnership with Nvidia, Nebius promises its clients early access to Nvidia's Blackwell chips. Since relisting on Nasdaq at $20 in late October, Nebius stock has risen over 41%. Potential New AI Favorite Citron Research's Andrew Left highlighted Nebius's potential, noting Wall Street's slow recognition. As no analysts currently cover Nebius, its return to Nasdaq only months ago may explain the delay in coverage. Nebius's financial metrics are promising, with revenue climbing 766% year over year and reducing losses by 45% recently. It holds roughly $2. 3 billion in cash with minimal debt. The company plans to invest $1 billion in expanding GPU clusters in Paris and a data center in Finland. By 2025's end, management forecasts an annual revenue run rate between $750 million and $1 billion. While Nvidia's shares trade at 47 times forward earnings, Nebius, expected to be profitable next year, trades at under 8 times forward earnings, which is notably low in today's market. Given its expected growth and market presence, Nebius is considered undervalued. Left compares it to Coreweave, another AI infrastructure company expected to go public at a $35 billion valuation, whereas Nebius holds a market cap of about $6. 7 billion. Coreweave's IPO announcement could clarify Nebius's market standing. While Nebius’s Russian ties and recent geopolitical events pose challenges, investments from Accel and Nvidia enhance its credibility, making Nebius a standout opportunity at its current valuation.