Investors are ramping up AI infrastructure spending, with IDC projecting $758 billion by 2029. Nebius Group N.V. (NBIS) and Microsoft Corporation (MSFT) offer different investment paths in this booming sector. Nebius focuses on GPU capacity and cloud platforms, while Microsoft embeds AI across its products, enhancing its competitive edge.

Nebius aims to expand data centers to meet AI demand, targeting $7-$9 billion in revenue by 2026. Facing challenges like rising costs and capital outlays, Nebius tightens revenue guidance to $500-$550 million for 2025. Meanwhile, Microsoft plans to double data center footprint, investing $23 billion in AI to meet growing global demand.

NBIS stock has dropped 15%, while MSFT increased 0.1% in the past month. Valuation-wise, Microsoft seems undervalued compared to Nebius. Analysts revised earnings estimates downward for NBIS but slightly upward for MSFT. With a Zacks Rank #3, Microsoft presents a better pick over Nebius’ Zacks Rank #4.

Read more at Nasdaq: NBIS vs. MSFT: Which AI Infrastructure Stock Has More Upside?