Stocks

Historical Trends Indicate Nasdaq Will Thrive in 2025: A Look at Nebius Group

Published January 18, 2025

Since the launch of ChatGPT on November 30, 2022, financial markets have seen remarkable growth, with the S&P 500 (^GSPC) rising by 48% and the Nasdaq Composite (^IXIC) experiencing an impressive 69% increase.

The excitement surrounding artificial intelligence (AI) has helped revive the capital markets after a challenging year in 2022. Many investors are curious about how long this bull market will continue; however, historical patterns suggest that 2025 could be another standout year, especially for technology stocks.

This article will explore why the Nasdaq is poised for another successful performance in 2025. Additionally, we will highlight how the AI infrastructure company Nebius Group (NBIS) is in an excellent position for growth.

A Historical Perspective on the Nasdaq

Since its formation in 1971, the Nasdaq Index has experienced negative annual returns only 14 times. Notably, it has only faced back-to-back yearly declines twice: once from 1973 to 1974 and again from 2000 to 2002.

This historical context underscores the resilience of the Nasdaq. Aside from these two instances, the index has consistently showcased its ability to rebound after a downturn.

The most recent downturn for the Nasdaq occurred in 2022, which saw the index drop by a staggering 33%. In contrast, current macroeconomic indicators, such as easing inflation, the Federal Reserve's interest rate adjustments, and the surge in AI developments have left investors feeling optimistic.

In the years following this decline, the Nasdaq rallied with gains of 43% in 2023 and an additional 29% in 2024. Given these trends, many analysts believe the index is ready for another prosperous year ahead.

What is Nebius Group?

If you haven’t heard of Nebius yet, you are not alone, as the company has a relatively short trading history. Nebius was spun off from Yandex, a well-known Russian internet firm.

Due to sanctions from the U.S. and E.U., Yandex decided to separate its non-Russian operations, leading to Nebius becoming an independent entity and starting to trade on the Nasdaq just months ago.

With such a recent history, you might wonder why Nebius presents a promising investment opportunity. The reason lies in its connection to Nvidia.

Why 2025 Might Be a Breakout Year for Nebius

Nebius recently completed a significant private placement, raising $700 million by issuing 33.3 million shares at a price of $21. One of the main backers of this deal was Nvidia, which raises eyebrows about Nebius's potential.

The company focuses on AI infrastructure specifically for data centers. According to recent statements, Nebius plans to play a crucial role in scaling Nvidia's new Blackwell GPU architecture across Europe and the U.S.

This partnership is significant; Nebius raised its annual recurring revenue (ARR) forecast for 2025 to between $750 million and $1 billion. This is a meaningful increase from previous estimates of around $500 million.

Nvidia’s investment and its involvement with the Blackwell launch signal confidence in Nebius’s execution capabilities. Analysts are likely to pay close attention to companies within Nvidia's supply chain, including Nebius, in the coming years.

Given these developments, now could be a strategic time to invest in Nebius. The Blackwell architecture is still in its early phases, implying significant growth potential for Nebius throughout 2025 and beyond.

The AI infrastructure market continues to expand rapidly, providing opportunities for Nebius to become a key player among chip companies and major cloud providers.

Nasdaq, AI, Growth