Nvidia's Investment Boosts Outlook for AI Companies

Nvidia's major stake in Nebius Group and WeRide hints at strategic growth. Investors should watch these AI stocks closely.

Date: 19-02-2025

AI Rating: 5

Investment Confidence from Nvidia
Nvidia's recent investments in Nebius Group and WeRide signal strong confidence in AI and autonomous vehicle markets. Although these companies currently report losses, Nvidia's involvement can positively influence stock perceptions.
Net Income and Revenue Decline
Both Nebius Group and WeRide are currently unprofitable, with Nebius reporting a net loss of $96.8 million and a meager revenue of $5 million. WeRide also experienced a decline in revenue to $10 million while showcasing a significant net loss of $148.6 million in its latest quarter. Such fiscal performance might cause concern among investors, as profitability remains critical for stock price stability.
Competitive Landscape
Nebius Group faces competition from established cloud services like Amazon and Google, while WeRide competes against Alphabet's Waymo and other heavyweights. The presence of these substantial rivals could hinder market penetration and lead to long-term challenges.
Opportunities for Speculative Investors
While current financials are concerning, Nebius presents an interesting speculative option because of its energy-efficient data center. The growth potential in the AI infrastructure market might allow for multiple successes, despite competition. The diversified business model also offers additional revenue streams for Nebius, which could enhance its attractiveness to investors in the long run.

Stocks: NVDA NBIS WRD