Nebius Group N.V. (NASDAQ: NBIS)
NBIS stock is up about 180% this year. Revenue is exploding, but so are costs and debt.
What does Nebius do?
Nebius is an AI cloud company. It rents out GPU computing power. It is building a full platform for developers and companies, from data and model training to live deployment.
The AI cloud business makes up about 98% of group revenue. Nebius also owns Avride, an autonomous vehicle platform, and TripleTen, an edtech service. Both are small. Nebius competes in a crowded field of AI cloud and GPU providers, so we also track $IREN.
Short term technology progress
Nebius is scaling power and products at the same time.
It ended 2025 with about 170MW of active power, against a target of 100MW. It now targets 800MW to 1GW of connected power by the end of 2026.
On the product side, it runs Token Factory, an inference platform with open models such as Kimi K3, GLM 5.2 and Nemotron Ultra. It also plans to use Nvidia’s Groq 3 LPX for fast inference. In September, Palantir named Nebius its preferred sovereign AI infrastructure partner.
Long term technology progress and goal
The next big step is Nvidia’s Vera Rubin chip. Meta signed a five year deal worth up to $27 billion, with $12 billion tied to large Vera Rubin deployments from 2027.
Nebius also plans a Pennsylvania site. The first 250 to 300 megawatts go live by the end of 2027. The site reaches 1.2 gigawatts by 2030. Contracted power is now guided to 5GW by year end, raised from more than 4GW.
The goal is simple. Nebius wants to be a full AI hyperscaler that competes with AWS, Azure and Google Cloud.
Is Nebius on track with its roadmap?
So far, yes. In 2025, ARR ended at $1.25 billion, ahead of the $900 million to $1.1 billion guidance. In Q2, management reaffirmed all 2026 guidance.
The hard part is still ahead. ARR must rise from $3.0 billion to $7 billion to $9 billion by December. Most of this year’s capacity comes online in the second half. One Morgan Stanley model has active power near 230MW in Q1 and 780MW by Q4. That is a steep climb.
Is revenue growing?
Yes, very fast.
Q1 revenue was $399.0 million, up 684% from a year earlier. Q2 revenue was $582.3 million, up 454% year over year and 46% from Q1. Annualized run rate revenue hit $3.0 billion in June, up 56% from $1.9 billion in March.
Full year 2025 revenue was $529.8 million. Analysts expect $904 million in Q3, which is about 55% growth over Q2 by my math. Nebius reports around October 22.
How is EPS trending?
EPS is still negative, but the trend is mixed.
Reported EPS was a loss of $0.95 in 2024 and a loss of $1.83 in 2025. In Q2, GAAP EPS was a loss of $0.68, while adjusted EPS was a loss of $0.12.
Do not trust the Q1 headline profit. Net income was $621.2 million, but the adjusted net loss was $100.3 million. In Q2, the adjusted net loss narrowed to $33.2 million, while the GAAP net loss was $190.4 million.
Analysts expect losses per share of $2.23 in 2026, $3.49 in 2027 and $1.44 in 2028, most likely because depreciation rises with the GPU buildout. The first profit, $10.49 per share, comes in 2029. Only two analysts cover that year, so treat it as a rough guide.
Did EBITDA improve?
Yes, a lot. Adjusted EBITDA went from a loss of $21.0 million in Q2 2025 to a gain of $236.2 million in Q2 2026. The margin rose from 32% in Q1 to 41% in Q2.
Gross margin is a healthy 74% over the last twelve months. But EBIT margin is still negative 37% because GPUs lose value fast.
How is cash flow?
Operating cash flow improved sharply. It was positive $2.26 billion in Q1, versus an outflow of $184.1 million a year earlier. Q2 added another $2.3 billion.
There is a catch. Much of that cash comes from customer prepayments. Deferred revenue rose from $1.58 billion to $5.98 billion in the first half. Free cash flow is still negative. In Q2, $2.3 billion of operating cash minus $5.7 billion of capex leaves a gap of about $3.4 billion.
How much is Nebius spending on capex?
Q1 capex was $2.47 billion. Q2 jumped to about $5.7 billion. The 2026 guide is $20 billion to $25 billion.
That leaves roughly $12 billion to $17 billion for the second half. That is about $6 billion to $8 billion per quarter by my math.
How much funding does Nebius need, and how long does cash last?
Cash fell from $9.3 billion in March to $8 billion in June.
Management plans to fund growth in layers. It expects more than $9 billion in customer prepayments in 2026. In July it raised $775 million in secured debt at SOFR plus 2.50%, backed by more than $40 billion in customer commitments. It also has an at the market stock program and may issue corporate debt. Earlier this year it raised $4.3 billion in convertible notes and $2 billion in prefunded warrants. One analyst put debt near $8.5 billion.
My rough math: $8 billion in cash, plus $0.8 billion of new debt, plus about $4 billion to $5 billion of prepayments still to come, totals about $13 billion. That is near the low end of second half capex. So 2026 looks mostly funded, with a possible gap of a few billion dollars. 2027 will need more capital. Expect more debt and more share dilution. This is an estimate, not company guidance.
When could Nebius become profitable?
It is already EBITDA positive. Net profit looks about three years away, based on analyst estimates for 2029. Consensus revenue climbs from $3.34 billion in 2026 to $12.3 billion in 2027, $23 billion in 2028 and $36.6 billion in 2029.
What is the guidance?
For 2026, Nebius guides to group revenue of $3 billion to $3.4 billion, ARR of $7 billion to $9 billion, an adjusted EBITDA margin near 40% and capex of $20 billion to $25 billion. That implies about $2.0 billion to $2.4 billion of revenue in the second half.
Long term, there is no formal 2027 guide yet. Management says formal guidance comes later this year. The long term story rests on the $40 billion backlog, the Meta and Microsoft contracts and the 5GW power target.
Are institutions buying NBIS?
I cannot give a clean three year percentage. Nebius was called Yandex N.V. until August 2024, so older data is not comparable.
Data providers also disagree. MarketBeat showed 21.9% in October 2025. Fintel shows about 54%. Financhill shows about 66%.
The direction is clearly up. Institutional holders rose from 283 to 307 last quarter, and shares held rose 27%. Lone Pine and Soros opened new positions in Q2. Situational Awareness LP disclosed a 5.6% stake. Orbis cut its stake sharply.
What do analysts say?
Most say buy. Most price targets run from $250 to $410. BTG Pactual is neutral at $223. Northland is at $410, BNP Paribas at $399, Truist at $355, Goldman Sachs at $328 and Citi at $324. D.A. Davidson rates it hold at $250.
The bear case is loud too. Rothschild Redburn started with a Sell and an $84 target. It cites falling GPU rental prices, hyperscalers building their own capacity and costly financing.
Why NBIS stock may be worth it
The case for buying is simple.
- Demand beats supply. Nebius said it sold out its capacity again in Q1.
- It has pricing power. It plans roughly 20% GPU price hikes from October 1.
- It has big, named customers and a backlog above $40 billion.
- Margins are improving fast.
- Nvidia invested $2 billion, which helps with chip access.
The risks to weigh
Capex is huge. Debt is rising. Dilution is likely. GPU prices could fall. The stock is up a lot, and a few big customers drive much of the demand. A miss on the second half ramp could hit the price hard.
NBIS stock fits investors who accept high risk for high growth. Keep position size modest. Watch Q3 results on October 22 and the 2027 guidance.
Sources: Tipranks, SeekingAlpha, Tradingview, TIKR
Disclosure: The author holds a long position in $NBIS stock at the time of writing
