Can Nebius Be Europe's Most Valuable Company?
Nebius can dethrone SAP after data centres boom
Today’s 17% jump in IREN stock feels like a replay of the Nebius Group (NBIS) story, whose shares soared from $39 to $50 almost instantly. This isn’t a coincidence; it’s a clear signal. Over the next 2-3 years, investor focus will be squarely on companies that own and operate data centers. And despite this explosive growth, we seem to be only at the beginning of the journey.
Nebius Group (NBIS) has already reached a valuation of $113 per share while analysts see $200 ahead. I wouldn’t be surprised if this company—formally European but earning its primary revenue in the U.S.—eventually becomes the most valuable in its class.
Currently, Nebius Group has a market cap of $28 billion, while Europe’s most valuable company, SAP, with a market cap of €350 billion, didn't grow this year. It makes you wonder: does retail actually know what SAP does anymore, and are people even buying its stock? If I was ostracized for seeing growth potential in MSFT stock, what does that say about SAP?
The Future Is Consolidation
Could Nebius Group grow tenfold to catch up to the German giant’s market cap? Given the trillions of dollars being poured into data centers, it’s entirely plausible. These companies also have a great opportunity to grow through mergers and acquisitions. The higher your stock price, the more you can afford to do. The example of CoreWeave and Core Scientific (CORZ) shows that the sector is on the verge of major consolidation.
Merging not only helps attract more capital but also allows for lower prices for clients. In essence, IREN, through its CEO Daniel Roberts, has declared a price war. He told Yahoo Finance that thanks to vertical integration—owning their own land, power, and equipment—the company can offer unprecedentedly low prices.
This will inevitably intensify competition and accelerate market consolidation. And Nebius Group is in a strong position here, as the company has a history of expanding into diverse industries.
Playing in the Big Leagues
Furthermore, support from NVIDIA and Microsoft has propelled Nebius Group into the “big leagues.” This means a new reality: tougher competition, higher capital requirements, and the need to strive to become the next Oracle. That’s the logic of business. The market’s positive reaction to the CoreWeave and Core Scientific merger was due to the potential for cost reductions of $500 million.
Ultimately, Neoclouds will merge, and their market capitalization will clearly grow. It’s no surprise that analysts are so sharply upgrading their outlooks for the sector. America is ready to invest trillions to ensure China can’t catch up, following its three-year plan to produce advanced chips.
Many funds, following Softbank’s path, will want to catch the last train of the AI revolution. From that perspective, both Nebius Group and Bitcoin miners are attractive investment targets, and the prices we see now are just the beginning.
This publication is for educational and informational purposes only and does not constitute financial, investment, or trading advice. Readers are solely responsible for their own investment decisions. The author may hold positions in the securities mentioned.