Nebius, AI Spin-Off from Russia’s Yandex, Surges 5.6% in IPO Debut

Nebius Group, an Amsterdam-based startup that spun out from the breakup of Russian tech giant Yandex, made its much-anticipated debut on Wall Street with an initial public offering (IPO). After some early turbulence, the company’s shares bounced back, closing 5.6% higher on Monday, marking its first trading day since February 2022.

Trading for Nebius was halted shortly after Russia’s invasion of Ukraine when the company’s stock was still trading under Yandex’s name. Despite a rocky start, where shares dropped 26% in pre-market trading, they ended the day with a solid gain, closing at $20 per share—above their pre-suspension price of $18.94, Reuters reported.

This debut comes on the heels of a $1 billion funding round in September, which is set to fuel Nebius’ AI infrastructure expansion across Europe by 2025. Nebius projects its revenue to surge three to four times in 2025, reaching between $500 million and $700 million, it announced on Friday. To support this growth, it plans to invest $600 million to $1.5 billion in expanding data center capacity across Finland, France, and North America.

Once valued at over $30 billion, Yandex had a stronghold in online search, advertising, and ride-hailing, primarily in Russia. Nebius, now focusing on AI cloud services, brings a new angle to the table. It aims to carve out a space in the growing AI cloud market, distinguishing itself with its energy-efficient data center in Finland and ambitious expansion plans across Europe.

Already this year, the company has committed around $200 million towards expanding its data center capabilities, gearing up with thousands of GPUs to power AI services globally. Nebius is also securing additional sites to meet future demand and increasing capacity at its current facilities, positioning itself for substantial growth.

With a significant portion of its stock—78.1%—held by Western investors and funds, market watchers expect high volatility in the initial days of trading. Denis Buivolov, head of research at BCS and an investor in Nebius, values the company at around $4.6 billion, or $23 per share, comparing it to peers like CoreWeave and Lambda Labs.

Some investors, like Dr. Jan-Oliver Strych, believe the stock’s future will depend on how the market balances AI investor enthusiasm against the impatience of sellers looking to cash out quickly. With Nebius providing AI services powered by Nvidia’s GPUs, expectations are high for growth in the AI cloud space over the coming years.

Back in July, a Russian consortium completed a $5.4 billion deal to acquire Yandex’s Russian assets, marking one of the largest corporate exits since Russia’s invasion of Ukraine. Nebius, now independent from its Russian ties, is gearing up to become a major force in AI infrastructure, Nebius founder and CEO Arkady Volozh said.

The Nebius portfolio includes data partner Toloka AI, edtech business TripleTen, and self-driving tech unit Avride. Though the company has inherited Yandex’s Nasdaq listing, trading remains on hold for now.

As part of its expansion, Nebius is investing in boosting GPU capacity, including the Paris-based GPU cluster, featuring Nvidia GPUs. With plans to build two more data centers in Europe and extend its Finland operations, Nebius is setting the stage for significant growth in the AI space.