An investment in artificial intelligence (AI) infrastructure specialist Nebius Group (NBIS 0.23%) was looking like a smart move this week. That’s because, according to data compiled by S&P Global Market Intelligence, over the period the company’s share price ballooned by more than 11%.
An investment from a high-profile business person was a significant catalyst behind the rise, but that wasn’t the only factor.
A strategic investment and a bullish new analyst take
On Wednesday, news broke that no less a personage than Amazon founder and ex-CEO Jeff Bezos, in the form of his private investment business, had plowed some capital into Nebius.
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This strategic investment is directing $72 million into Nebius unit Tokola, which specializes in training and analyzing AI models.
The funds will allow that business to further its development in an environment of persistently heavy demand for AI and to do so independently. Nebius is retaining a majority stake in Tokola despite that operational independence and the Bezos firm’s involvement.
New bull recommends a buy
The market was already bullish on Nebius when that news was reported. The previous day, an analyst initiated coverage of the company’s stock with a bullish take on its prospects. Nehal Chokshi of Northland rated the shares an outperform (i.e., buy) at $34 per share.
According to reports, Chokshi believes the company is well positioned to gain market share and to garner significant amounts of valuable free cash flow. His price target anticipates 20% upside for the stock.
While the generous Bezos investment and highly positive Northland take on Nebius will surely boost sentiment in the stock, management is now on the hook to deliver on those raised hopes. Regardless, it’s a well-regarded operator in a white-hot segment of the tech market, so at the moment, its prospects look quite encouraging.
John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon and Nebius Group. The Motley Fool has a disclosure policy.
