10 Best Performing Software Stocks to Buy According to Analysts

8. Nebius Group (NASDAQ:NBIS)

YTD returns: 24%

Potential Upside: 52%

Number of Hedge Fund Holders: 66

Nebius Group (NASDAQ:NBIS) provides AI-focused infrastructure and services to developers worldwide through its cloud platform, Nebius AI. This platform offers a full-stack infrastructure, including large-scale GPU clusters, cloud services, and developer tools. Beyond its AI cloud offerings, the company also operates Toloka, a data solutions provider supporting generative AI development; TripleTen, an edtech platform focused on reskilling individuals for tech careers; and Avride, which develops autonomous driving technology for self-driving vehicles and delivery robots.

In December 2024, Nebius Group (NASDAQ: NBIS) raised approximately $700 million from investors to expand its full-stack AI infrastructure. Driven by this funding and the broader optimism surrounding AI, its stock has been on an upward trend since the start of the year, climbing 74% by February 18 to reach a 52-week high of $48.07, despite a 37% decline during the DeepSeek sell-off. However, following the release of its Q4 2024 earnings on February 20, shares dropped by 30%, leaving the stock with a 24% YTD gain.

For Q4 2024, the company reported impressive revenue growth of 466%, with its core AI infrastructure segment revenue surging 602%. However, annual recurring revenue (ARR) for its Nebius business reached $90 million, falling short of previous guidance due to longer customer acquisition lead times. Additionally, the adjusted net loss widened to $87.5 million, compared to $85.3 million in Q4 2023. These results led to mixed reactions from analysts, raising concerns about the company’s long-term profitability.

Despite this, an analyst from D.A. Davidson initiated coverage on Nebius Group (NASDAQ:NBIS) with a Buy rating and a $50 price target, believing the company is emerging as one of the first real alternatives to the hyperscaler-dominated AI compute market.