AI data center operator stocks are on the rise in 2025, but several concerns could weigh on them next year.
neo cloud provider nevius group (NBIS +0.91%) is one of the hottest stocks on the market in 2025, up an impressive 223% year-to-date. This incredible surge is due to rapidly growing demand for artificial intelligence (AI) data center infrastructure, significantly outstripping supply.
The good news is that Nevius stock looks like it has more upside next year, Wall Street analysts say. However, the stock price has experienced a significant decline in recent months. Let's see why this happened.
Image source: Getty Images.
Concerns about debt-fueled AI infrastructure spending weigh on Nebius stock
Nebius has shed about a third of its value since hitting a 52-week high on Oct. 10. This may come as a surprise considering the incredible pace of growth. In the first nine months of 2025, revenue increased 437% to $302 million. It also has a large backlog of orders and should be able to maintain that momentum.
Today's changes
(0.91%) $0.82
current price
$90.85
Key data points
Market capitalization
$23 billion
daily range
$88.65 – $91.37
52 week range
$18.31 – $141.10
volume
1.8M
average volume
19M
gross profit
-1312.43%
It's worth noting that Nebius rents all available data center capacity. The company plans to increase the power capacity of its connected data centers from 800 megawatts (MW) to 1 gigawatt (GW) by the end of next year, a significant increase from the current capacity of 220 MW.
This aggressive expansion plan should help Nebius turn a significant portion of its $20 billion-plus backlog into revenue next year and over the long term. However, stock prices may still tend to fluctuate significantly for several reasons.
First, it trades at a high premium of 64 times sales. For comparison, we used a lot of technology. Nasdaq Composite The index has a price-to-sales ratio of just 5.5. Of course, Nebius has enough backlog that it could eventually grow sales enough to justify its current stock price, but to do that it needs to secure funding to bring more capacity online.
This brings us to the second reason why Nebius appears to be a risky investment at this point. At the end of last quarter, the company had $4.8 billion in cash and $4.6 billion in debt. More funding will be needed to support data center expansion plans. It costs an estimated $10 billion to build a 1 GW data center, and an additional $20-30 billion for the chips that power it.
Nebius' management says it will “utilize at least three sources of financing: debt, asset-backed financing, and equity” to meet its financing needs over the next few years. As such, Nebius investors should expect to face some dilution of their shares. On the other hand, the company will take on more debt and bear the associated increase in interest expense.
These factors are likely to weigh on the stock, especially considering investors are already growing concerned about the viability of debt-driven AI infrastructure financing.
However, there are cheaper and safer options for investors who want to take advantage of ongoing large-scale AI infrastructure investments. Dell Technologies (Dell +0.32%).
Dell's server advantage could send stock price soaring in the long run
Dell became famous for its personal computers, laptops, workstations, and peripherals. However, recently, the introduction of AI has led to significant growth in the server business. The company makes the server and storage solutions that companies like Nebius deploy in their data centers and the network infrastructure that helps them run AI workloads in the cloud.
More importantly, Dell is a significant player in the global server space, with a market share of just over 8%. Moreover, its share in the fast-growing AI server market is estimated at 20%, according to ABI Research. 2nd place hewlett packard enterpriseshare is 15%.
This strong position in a high-growth business explains why Dell expects AI server revenue to grow 150% this year to $25 billion. And sales levels are likely to continue rising. Dell reported a record $18.4 billion backlog as of Oct. 31, the end of the third quarter of fiscal 2026. During last month's earnings call, management noted that the potential AI server order pipeline for the next five months is “several times our order backlog,” suggesting that revenue from this segment is expected to increase further.
Investors should note that the AI server market could grow at an annualized rate of 39% through 2030, generating revenues of $854 billion at the end of the forecast period, according to Grand View Research. Dell's AI server business is growing at a much faster pace than it is today, meaning it's gaining market share in this space. Assuming Dell can capture a quarter of the AI server market by the end of 2020, annual revenue from this segment could soar to more than $213 billion (based on an $854 billion market size estimate).
That's nearly nine times the revenue the company expects to generate from sales of AI servers this fiscal year. Throw in additional catalysts that could boost the business, such as generative AI-enabled personal computers, and it's easy to see why buying Dell, which trades at just 0.8 times sales, is a no-brainer investment. Of course, the company isn't growing as fast as Nebius, but its leading position in the AI server market, combined with steady growth in revenue and earnings, makes it a safer choice for investors looking for a combination of growth and value.
