Nvidia ( NVDA 0.86%) and Palantir Technologies ( PLTR 0.11%) have been reliable choices for investors seeking significant returns in recent years—and that trend continues, with both stocks on track for gains of over 30% and approximately 130%, respectively, this year. Their continued success is largely due to their strong positions in the artificial intelligence (AI) sector.
Nvidia is the creator of the world’s most in-demand AI chip, powering critical AI processes. Meanwhile, Palantir enables its clients to quickly implement AI into their businesses, delivering transformative outcomes. Both companies are already reaping the rewards of AI, as are their customers.
Despite these achievements, Nvidia and Palantir have not been the top performers among AI stocks in recent months. In fact, one particular company has far outpaced these industry leaders in terms of stock appreciation. Let’s take a look at the AI stock that’s outperforming Nvidia and Palantir in 2025.
A new AI player
You might be surprised to learn that this contender, as it exists today, was not around just a year and a half ago. It emerged after Russian tech giant Yandex divested its Russian operations last summer and restructured under a new name, now headquartered in Amsterdam. The company in question is Nebius Group ( NBIS -7.63%), whose stock has surged over 300% this year.
Nebius has quickly gained attention by providing a service that is currently in high demand—and likely will be for years to come. The company specializes in neocloud services, offering AI computing resources along with a suite of managed services for its clients.
This approach is highly convenient, as customers can rent access to powerful GPUs from Nebius instead of purchasing their own. It also saves time, since clients can utilize Nebius’s existing infrastructure rather than building their own facilities from scratch.
Competing with cloud giants
Of course, Nebius faces competition from major cloud providers like Alphabet’s Google Cloud and Microsoft Azure, which also allow customers to run AI workloads. However, while these large cloud companies offer a broad array of services beyond AI, Nebius has chosen to focus specifically on serving AI clients. This targeted approach may allow Nebius to better tailor its offerings and distinguish itself in the market. Additionally, the demand for AI computing power is so robust that both established cloud giants and emerging neocloud companies like Nebius have opportunities for growth.
When it comes to growth, Nebius has truly impressed investors, which is reflected in its outstanding stock performance. In the latest quarter, the company reported revenue growth exceeding 600%, building on momentum from the first quarter, when revenue climbed 385%. With quarterly revenue now just above $100 million, there is significant potential for further expansion as more AI clients seek computing resources.
Should you buy this soaring stock?
So, is it wise to invest in this stock after such a remarkable rally this year? While Nebius appears well-positioned for continued growth, its relatively short history in the neocloud space and limited track record of revenue and profit introduce some risk.
If you prefer a more conservative approach, you might opt for a well-established cloud provider—such as Alphabet—that has demonstrated consistent earnings growth. Alternatively, if you want a focused AI investment, Nvidia remains a compelling choice, as its growth trajectory is far from over.
However, if you’re a bold investor looking to capitalize on the next wave of AI expansion—as businesses race to secure computing power for training, inference, and more—adding some Nebius shares to your portfolio could be a smart move. This company, which is outpacing AI heavyweights like Nvidia and Palantir, may continue its impressive ascent in the coming quarters.
