This Genius AI Stock Has Far More Potential Than Nvidia in 2026
Keithen Drury, The Motley Fool
Thu, January 15, 2026 at 5:20 AM EST
5 min read
In this article:
Key Points
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Nebius deployed Nvidia's GPUs in its data center space.
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Nebius believes it can achieve a $7 billion to $9 billion annual run rate by the end of the year.
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The stock is priced cheaply if this strategy pans out.
Nvidia (NASDAQ: NVDA) is the gold standard of artificial intelligence (AI) investing. It has led the way since 2023, rising to become the world's largest company. However, other, more explosive AI stocks can deliver outsize returns, and investors may want to consider them for smaller, riskier positions that can provide monster growth.
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One that I'm excited about is Nebius (NASDAQ: NBIS). Nebius is growing at an unbelievable pace, and if it hits its growth projections by the end of the year, it could be a huge winner for investors and far outperform Nvidia.
If you're looking to add a bit of rocket fuel to your portfolio, Nebius is a great place to look.
Nebius uses Nvidia's products
Nebius isn't a competitor to Nvidia; it's a client. Nebius purchases top-of-the-line Nvidia GPUs and places them in data centers that it owns and rents. It sets these up in computing clusters, allowing clients to rent them to perform various AI tasks. This is a similar business model to cloud computing, which has already proven itself to be a viable and massively profitable business model.
Nebius operates a computing cluster in Europe and the U.S., although its past was based in Russia. Nebius was spun out of Yandex, essentially the Russian Google, after sanctions from the Ukraine war made its non-Russian assets undesirable. After the spinoff, clients had no problem using Nebius' computing infrastructure, and it is expecting unprecedented growth in 2026.
At the end of Q3, Nebius has an annual run rate of $551 million. That's not too shabby, but it's nothing compared to where the company believes it will be by the end of 2026. Management expects to be in the $7 billion to $9 billion annual run rate range by the end of the year, which would represent monster growth. If Nebius achieves that growth, its stock will likely spike as a result.
Currently, Nebius trades for an expensive 65 times sales. However, that's a poor metric to use since we know that Nebius' revenue is expected to explode throughout the year.
If we utilize forward sales, that decreases the stock valuation to 7.1 times sales, not a bad price to pay for a cloud computing company. If you move out to 2027 times sales, it drops to a mere 3.2 times sales.
These are projections, and there's no guarantee that Nebius will actually hit them. However, one thing that likely won't change is the demand for its computing infrastructure. We're nowhere near the amount of computing capacity the AI hyperscalers want, and growth is expected to persist through 2030.
Story Continues
If Nebius continues to hit growth expectations, I have no doubt the stock will be a massive winner in 2026 and beyond, crushing Nvidia. But there's one thing to watch out for.
Profits aren't on Nebius' mind
Nebius is in a growth-at-all-costs phase. It sees a huge market, and it is looking to capture it while there is demand. As a result, it's throwing profitability to the wind to go all-in on building out the AI computing infrastructure that's in demand.
This could pay off big-time for Nebius and its shareholders, or it could collapse the company. Nebius has borrowed a lot of money to finance its future, but it doesn't produce any profits to pay off the debt right now.
That could all flip once the company has built out the computing capacity it wants and is getting massive annual cash flows from its computing systems. Time will tell if this ends up being a working strategy, but if it works out, Nebius will surpass Nvidia's stock performance alongside the broader market. If something goes wrong in its strategy, Nebius stock could be in trouble. This is a high-risk, high-reward play, and investors should position their portfolio sizing accordingly.
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Keithen Drury has positions in Nvidia. The Motley Fool has positions in and recommends Nvidia. The Motley Fool has a disclosure policy.
This Genius AI Stock Has Far More Potential Than Nvidia in 2026 was originally published by The Motley Fool
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