Meet the Nvidia-Backed Stock That's Growing at a 454% Pace (It's a Screaming Buy Right Now)

Nvidia (NASDAQ: NVDA) is the world's largest company. It got that way, in part, by partnering with several of the world's fastest-growing companies to fuel an AI-powered future. Through these interactions, Nvidia also identifies businesses it thinks are worth investing in. One company it bought shares in is Nebius Group (NASDAQ: NBIS).

Nebius is one of the fastest-growing, publicly traded cloud computing companies, and it looks like a great stock to invest in. Its growth should propel it to new heights over the next few years, making it a smart stock to buy now.

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Nebius' rapid growth rate isn't short-lived

I'll cut to the chase; the primary reason I think Nebius is a fantastic buy is its ludicrous growth rate. In the second quarter, Nebius' revenue grew by 454% year over year. There wasn't an acquisition or one-time deal that helped deliver that incredibly fast growth rate; it was organic growth fueled by incredible demand for its services.

Nebius' primary business is neocloud computing, which is cloud computing specifically for AI workloads. It's both constructing and renting out data centers, then outfitting those buildings with computing equipment, primarily from Nvidia. Nebius has a great relationship with Nvidia to obtain cutting-edge hardware before many others, making it a smart company to run AI workloads on.

Because of how much computing power the AI industry is expected to need, there's plenty more growth ahead, and Nebius is grabbing as much market share as possible by spending big right now. As a result, it isn't even close to profitable. However, investors shouldn't expect it to be because this is a once-in-a-lifetime opportunity for Nebius. All of this spending at an unprofitable level is fine with most investors as long as Nebius' growth rate stays elevated. Fortunately for investors, that's exactly what's expected to happen.

Wall Street analysts estimate that sales will grow by 533% in 2026 and 257% in 2027. When growth begins to fall to more normal rates, investors will start expecting Nebius to become more profitable. That may not be for years, as the AI build-out is expected to last through at least 2030.

Nebius has already seen significant share price growth, with the stock trading up 220% over the past year. Despite the rapid price escalation, its valuation remains somewhat reasonable on multiple metrics for a high-growth stock. Its trailing price-to-earnings ratio is 74.6, its forward P/E is 43.5, and its price-to-sales ratio is 41.7.

Nvidia interacts with several interesting companies, but for it to invest in Nebius suggests Nvidia management thinks Nebius has potential. I think this is about as good an endorsement as investors can ask for, and if you're looking to add a high-growth name with moonshot potential to your portfolio, Nebius is a great pick.

Keithen Drury has positions in Nebius Group and Nvidia. The Motley Fool has positions in and recommends Nvidia. The Motley Fool has a disclosure policy.