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Written by Keithen Drury for The Motley Fool->
Nebius operates a neocloud platform, which is growing like gangbusters.
Nvidia is heavily invested in Nebius -- an important show of confidence.
Wall Street expects Nebius' revenue to soar 20x over the next two years.
Nvidia (NASDAQ: NVDA) has rallied back to the $5 trillion level and has set a new all-time high. However, it's not the best-performing AI stock so far in 2026, not by a long shot. In 2026, Nvidia's stock has gained about 16% so far. That's solid, but there is more out there.
Nebius (NASDAQ: NBIS), ironically one of the companies Nvidia has invested in, is up an outstanding 73%. I think there's more outperformance available, and it might explain why Nvidia is invested in it.
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Nvidia is one of the fastest-growing companies on Earth. Next quarter, management expects to deliver 77% revenue growth. If a company decides to invest in another business, that's usually because it believes that the investment will provide a greater return than if it left it in cash or reinvested in itself. However, Nvidia owns a decent amount of Nebius stock, which indicates that it believes Nebius will do better than Nvidia. That's a major vote of confidence, and investors need to dive deep into Nebius' stock to decide if it's the right one for them.
Nebius is a neocloud company, a sub-segment within cloud computing. Neocloud businesses are cloud computing providers, but they are focused on AI-first cloud infrastructure. Nebius has a full-stack offering that has become quite popular for its user base. Clients have access to everything they need to train and run AI models through Nebius' servers, and demand for its platform is exploding.
At the end of 2025, its annual recurring revenue was $1.25 billion. By the end of 2026, it expects that figure to climb to $7 billion to $9 billion. That's just absurd growth, and it shows that Nebius is one of the fastest-growing companies on the market.
This isn't just a projection that management just made up, either. Wall Street analysts are also on board with major growth, and project 523% revenue growth in 2026 and 206% in 2027. On average, Wall Street expects Nebius' business to grow 20x from the end of 2025 to the end of 2027. Very few companies grow at that rate, and investors shouldn't squander the opportunity once they spot it.
That's a rapidly growing company, and it shows why Nvidia is heavily invested in it. I think Nebius' outperformance can continue, and its recent dip may be an ideal time to buy the stock.
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Keithen Drury has positions in Nebius Group and Nvidia. The Motley Fool has positions in and recommends Nvidia. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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