Nebius vs. Digital Realty: Which AI Infrastructure Stock is the Better Buy?

Nebius Group N.V. NBIS and Digital Realty Trust, Inc. DLR are benefiting from the rapid expansion of AI infrastructure as enterprises and hyperscalers accelerate investments in high-performance computing, AI cloud platforms and next-generation data centers. Growing demand for AI training and inference workloads is driving the need for large-scale GPU capacity, power-rich data center campuses and globally connected infrastructure, positioning both companies to capitalize on the ongoing buildout of the AI ecosystem.While Nebius is expanding its AI-native cloud platform by adding GPU capacity, securing long-term customer commitments and investing heavily in new AI infrastructure, Digital Realty is scaling its global data center platform through record leasing activity, hyperscale developments and expanded connectivity to support increasingly AI-driven workloads. Both companies continue to invest aggressively to meet rising AI infrastructure demand, although they are executing through different business models within the AI infrastructure value chain.Let’s evaluate their fundamentals, growth prospects, market challenges and valuations to determine which stock presents a stronger investment opportunity.The Case for NBISNebius is rapidly scaling its AI infrastructure footprint by expanding data center capacity and strengthening its AI-native hyperscaler platform. Within the past three months, the company has increased its contracted power capacity from more than 2 gigawatts to over 3.5 gigawatts and now expects to exceed 4 gigawatts by year-end. It also announced a new data center site in Pennsylvania, which is expected to support 1.2 gigawatts of power at full build-out. More than 75% of the company's contracted power capacity is now owned, reflecting its strategy of building and operating an integrated AI infrastructure platform with greater control over long-term capacity.The company continues to enhance its full-stack AI cloud platform by offering services across the AI lifecycle, including bare-metal infrastructure, multi-tenant cloud, inference and agentic capabilities. The acquisitions of Tavily, Eigen AI and Clarifai have strengthened its engineering capabilities while improving inference optimization and agentic search technologies. The company also expanded its collaboration with NVIDIA and achieved NVIDIA Exemplar Cloud status for GB300 training workloads, placing it among a limited number of cloud providers recognized across multiple GPU generations.Demand for Nebius' AI infrastructure remains strong across a broad range of industries, with management stating that several customers typically compete for every GPU brought online. During the first quarter, pipeline generation increased 3.5 times sequentially, supported by growing demand from AI-native companies, enterprises and software vendors. Customers spanning fintech, physical AI, life sciences, manufacturing, energy and pharmaceuticals are increasingly adopting the company's AI cloud platform. Nebius also delivered a strong first-quarter financial performance, with group revenue rising 684% year over year and the AI business recording 841% revenue growth, reaching an annualized run-rate revenue of $1.9 billion.For 2026, Nebius expects annualized run-rate revenue of $7 billion to $9 billion, group revenue of $3 billion to $3.4 billion and an adjusted EBITDA margin of around 40%. However, management expects quarterly EBITDA margins to fluctuate during the year as investments in infrastructure and capacity expansion are incurred ahead of revenue generation. Margins are expected to decline in the second quarter due to the back-half weighted deployment of new capacity before recovering to first-quarter levels in the third quarter and improving further in the fourth quarter.The company has also raised its 2026 capital expenditure guidance to between $20 billion and $25 billion from the earlier range of $16 billion to $20 billion to support additional AI infrastructure capacity planned for 2027. The increased investment is backed by customer commitments but will require incremental financing through asset-backed structures, corporate debt and other funding alternatives. The company continues to evaluate multiple financing sources while maintaining a disciplined approach to funding its long-term data center expansion strategy.The Case for DLRDigital Realty is gaining from robust AI infrastructure and data center demand, with enterprises and hyperscalers increasingly deploying AI workloads across its global PlatformDIGITAL ecosystem. The company said digital infrastructure has become foundational as AI adoption accelerates compute intensity, cloud demand remains resilient and enterprises continue investing in technology. This drove one of the strongest leasing quarters in the company's history, supported by rising demand for both interconnection services and large-scale hyperscale capacity.The company continues to strengthen its position in AI-ready infrastructure through record leasing activity and an expanding global footprint. The company signed its largest-ever lease, a 200-megawatt AI inference deployment with a hyperscale customer in Charlotte, while also securing multiple 10-plus megawatt AI-related leases across major global markets. AI-oriented bookings represented a record share of the 0-1 megawatt category, reflecting growing enterprise adoption. To support future demand, the company expanded its development pipeline to 1.2 gigawatts under construction, increased investments in hyperscale campuses and added new connectivity hubs and land acquisitions across North America, Europe and the Asia-Pacific.Digital Realty is also benefiting from strong long-term visibility supported by a record backlog and continued investments in AI-focused data center capacity. Management highlighted that customers are shifting AI deployments from pilot projects to production environments, particularly for inference workloads, while enterprise AI demand continues to expand. Record bookings lifted the backlog to $1.8 billion, with lease commencements extending into 2027 and beyond. Digital Realty is simultaneously scaling its private capital platform, expanding hyperscale development funding and securing additional land and power resources to meet customers' long-term AI infrastructure requirements.However, the rapid expansion of AI infrastructure continues to face industry-wide execution challenges. Management noted that limited power availability, labor shortages, supply chain constraints and community opposition are restricting the pace at which new data center capacity can be delivered. These factors are widening the gap between customer demand and deployable capacity, while utilities, equipment availability and construction timelines remain key variables across major markets.Digital Realty is also navigating higher development costs as inflation in land values, construction expenses, supply chains and liquid-cooling infrastructure increases capital requirements for new AI data centers. The company acknowledged elevated operating expenses during the quarter and expects continued investment spending to support hyperscale growth. While management believes market rental rates are strong enough to offset rising development costs and preserve targeted returns, higher capital intensity and ongoing infrastructure investments remain important considerations.Share Performance for NBIS & DLRIn the past three months, NBIS stock has surged 154.5% while DLR gained 10.4%.Image Source: Zacks Investment ResearchValuation for NBIS & DLRIn terms of Price/Book, NBIS shares are trading at 8.97X, higher than DLR’s 2.93X.Image Source: Zacks Investment ResearchHow Do Estimates Compare for NBIS & DLR?Over the past 60 days, analysts have significantly revised estimates for NBIS’ bottom line for the current year.Image Source: Zacks Investment ResearchFor DLR, estimates have been revised marginally upward over the past 60 days.Image Source: Zacks Investment ResearchNBIS or DLR: Which Stock is the Better Investment?Both NBIS and DLR currently carry a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.While Digital Realty provides a more established and stable data center platform supported by strong leasing activity and long-term backlog, Nebius' faster growth profile, improving earnings outlook and expanding AI-native platform make it the more compelling choice for investors seeking higher upside in the AI infrastructure space.Beyond Nvidia: AI's Second Wave Is HereThe AI revolution has already minted millionaires. But the stocks everyone knows about aren't likely to keep delivering the biggest profits. AI’s second wave is moving from infrastructure to implementation and these companies are at the forefront of this transition, positioned to become what Amazon and Google were to the internet era.See Stocks Now >>This article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks