Nebius Group N.V. NBIS and Super Micro Computer SMCI are two key players benefiting from the rapid expansion of artificial intelligence (AI) infrastructure. Nebius is scaling its AI cloud platform and computing capacity to serve AI developers and enterprises, while Super Micro provides the servers, liquid-cooling systems, networking and data-center solutions needed to support large-scale AI deployments. As demand for AI computing continues to rise, both companies are positioned to capture a meaningful share of this spending.
However, the two stocks offer very different investment profiles. Nebius is growing from a smaller base and is posting explosive revenue gains as it expands capacity, while Super Micro operates at a much larger scale with tens of billions of dollars in annual revenues and a sizable order backlog. Comparing their growth prospects, profitability, financial position and execution risks can help determine which AI infrastructure stock looks like the better buy.
Let's evaluate their fundamentals, growth prospects, market challenges and valuations to determine which one presents a stronger investment opportunity.
The Case for NBIS
Nebius is benefiting from strong demand for AI cloud capacity, supported by growing requirements from AI-native companies, new AI labs and enterprises. In the second quarter, the company closed four landmark deals averaging more than $1 billion each, while its contracted backlog reached $40 billion. Management also noted that it could sell its entire planned 2027 capacity under current terms, highlighting the strength of demand and providing visibility into future growth.
Another positive factor is Nebius' ability to improve monetization and expand capacity. The company launched a capacity auction that cleared at a price 15% above its previous highest level, while short-term capacity deals are being negotiated at significantly higher prices. Nebius also raised its year-end contracted power target to 5 gigawatts and expects to deploy more than 1 gigawatt of new capacity annually starting in 2027. Its asset-light partnership model could further support expansion by allowing partners to finance and operate infrastructure while Nebius provides its platform and customer demand.
Nebius is also seeing strong growth across revenue, profitability and AI-related services. Second-quarter revenue increased 454% year over year to $582 million, while annualized run-rate revenue reached $3 billion, up 598%. Growth was supported by additional capacity, higher utilization, the asset-light model, Token Factory and recent acquisitions. The company also expects increasing contributions from inference, agentic AI and other high-margin services as customers expand AI workloads across training, post-training and inference.
For 2026, Nebius reaffirmed annualized run-rate revenue guidance of $7 billion to $9 billion, Group revenue of $3 billion to $3.4 billion, Group adjusted EBITDA margin of approximately 40% and capital expenditures of $20 billion to $25 billion. The company expects to deploy significantly more capacity in 2027, while 2027 formal guidance will be provided later this year.
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However, the rapid capacity expansion requires substantial capital investment, which could affect Nebius' financial flexibility. Capital expenditures reached approximately $5.7 billion in the second quarter, mainly due to GPU purchases, GPU-related hardware and data center expansion. The company expects full-year 2026 capital expenditures of $20-$25 billion as it continues scaling capacity, making access to sufficient funding important for its growth plans.
Nebius also faces potential delays related to data center development and the time required to convert connected power into revenue. The company noted broader debates around data centers in the United States, while its Vineland, NJ, project still requires final approval for an amended site layout. In addition, connected power must go through data center commissioning, network and cluster deployment, platform installation and customer onboarding before revenue generation begins, creating a gap between capacity coming online and its contribution to revenue.
The Case for SMCI
Super Micro is benefiting from strong demand for AI infrastructure, with the company reporting more than $60 billion in new orders during the fourth quarter of fiscal 2026. Revenue nearly doubled year over year to $39.1 billion for fiscal 2026, while the company ended the year with record backlog levels. Management expects this momentum to continue, targeting fiscal 2027 revenue of $65 billion to $72 billion as customers continue investing in AI and data center infrastructure.
SMCI is gaining from the expanding portfolio of total data center solutions. Its DCBBS offering integrates GPU and CPU servers, storage, direct liquid cooling, networking, switches, data center management software and services, allowing customers to build and scale AI data centers more quickly. The company is also expanding its product lineup across NVIDIA, AMD and Intel platforms, while developing solutions for agentic AI, inference and other high-performance workloads.
SMCI is also working to improve profitability through customer and product diversification. Enterprise and channel revenue increased 172% year over year in the fourth quarter, while the company added more than 1 billion-dollar customers during fiscal 2026. Management is placing greater emphasis on enterprise, CPU-based servers, storage and IoT products, which generally carry higher margins than high-volume GPU products. The growing DCBBS business, including hardware, software and services, is also expected to support better long-term profitability.
For the first quarter of fiscal 2027, Super Micro expects net sales of $14.5-$15.5 billion. For full-year fiscal 2027, it expects net sales of $65-$72 billion compared with $39.1 billion in fiscal 2026. The outlook reflects continued AI infrastructure demand, record backlog and increasing contributions from enterprise, sovereign AI, NeoCloud and agentic AI opportunities.
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However, customer readiness and infrastructure constraints could affect the timing of revenue recognition. Fourth-quarter revenue of $11.1 billion was near the low end of guidance because some customers faced delays related to power, cooling, networking and overall data center readiness. Management expects some of the delayed revenue to be recognized in subsequent quarters, but such deployment delays can create quarter-to-quarter fluctuations in revenue and product mix.
Inventory and working-capital requirements also affect SMCI. The company's cash conversion cycle increased to 149 days in the fourth quarter, while inventory rose to $12.9 billion as it prepared for higher fiscal 2027 revenue. Management also acknowledged risks associated with rapid GPU platform transitions, noting that changes in technology or customer deployment schedules could create inventory exposure. Although the company is using noncancelable purchase orders and aligning procurement with shipment schedules, managing inventory remains important as the business scales.
Share Performance for NBIS & SMCI
In the past three months, NBIS stock has gained 1.8% while SMCI soared 9.3%.
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Valuation for NBIS & SMCI
In terms of Price/Book, NBIS shares are trading at 5.48X, higher than SMCI's 2.15X.
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How Do Estimates Compare for NBIS & SMCI?
Over the past 60 days, analysts have lowered estimates for NBIS' bottom line for the current year.
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For SMCI, estimates have been revised upward over the past 60 days.
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NBIS or SMCI: Which Stock is the Better Investment?
Super Micro benefits from a much larger revenue base, record backlog, strong fiscal 2027 growth expectations and improving exposure to higher-margin enterprise and data-center solutions. It also trades at a lower Price/Book multiple than NBIS, while earnings estimates have moved upward over the past 60 days.
Although Nebius offers impressive growth prospects, its heavy capital spending, execution risks and downward earnings estimate revisions make its risk-reward profile less attractive. Therefore, SMCI's scale, valuation and positive estimate trends give it an edge over NBIS right now.
Both NBIS and SMCI currently carry a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
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