Nebius Group N.V.

(NASDAQ Global Select)
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Bullish +65

Nebius Stock Surges 110% in 6 Months: Time to Buy, Hold or Sell?

AI infrastructure Acquisition Capacity expansion AI-generated analysis

πŸ“ˆ NBIS stock surged 109.5% in six months, outperforming NVIDIA (33.2%), Microsoft (42%), and CoreWeave (12.7%).

πŸ’° Q2 group revenues jumped 454% year-over-year to $582 million, with the AI business contributing $575 million.

πŸ“‰ Adjusted EBITDA improved significantly to $236 million in Q2 from a $21 million loss a year ago.

🀝 The company signed four major agreements averaging over $1 billion each with yields of $20-$25 million per megawatt.

⚑ Nebius raised its year-end contracted power target to 5 gigawatts, expecting most to come online within three years.

πŸ’Έ Capital expenditures totaled approximately $5.7 billion in Q2, with full-year 2026 capex expected between $20-$25 billion.

🏭 The company acquired Inferize to strengthen production inference capabilities on its Token Factory platform.

πŸ“Š Adjusted EBITDA margins expanded to 41% from 32% in the first quarter due to asset-light model contributions.

⏳ New capacity requires several months for commissioning, network building, and customer onboarding before revenue generation.

πŸ“‰ NBIS trades at a price-to-book multiple of 5.69X, higher than the industry average of 3.79X.

πŸ›‘ Investments in early-stage companies like Avride and TripleTen are weighing on consolidated profitability.

🏦 The company utilizes an asset-light partnership model where partners finance facilities while Nebius provides the platform.

πŸ“‰ Zacks Rank #3 (Hold) suggests existing investors can hold, but new investors may wait for a better entry point.

Bullish Signals
  • NBIS stock surged 109.5% in six months, significantly outperforming peers like NVIDIA and Microsoft.
  • Group revenues jumped 454% year-over-year to $582 million in Q2, driven by strong AI infrastructure demand.
  • Adjusted EBITDA reached $236 million in Q2, a turnaround from a $21 million loss a year prior.
  • Margins expanded to 41% from 32% in the first quarter due to higher revenues and asset-light model contributions.
  • The company signed four major agreements averaging over $1 billion each with favorable contract economics.
  • Upfront payments from contracts cover roughly 50%-60% of associated capital expenditures, improving cash flow.
  • Nebius raised its year-end contracted power target to 5 gigawatts to meet growing customer demand.
  • The acquisition of Inferize strengthens the production inference capabilities of the Token Factory platform.
  • The asset-light partnership model allows expansion with minimal balance-sheet capital requirements.
Risk Factors
  • Investments in early-stage companies like Avride and TripleTen are weighing on consolidated profitability relative to the core AI operation.
  • New capacity requires several months for commissioning, network building, and customer onboarding before revenue generation begins.
  • NBIS trades at a price-to-book multiple of 5.69X, which is higher than the industry average of 3.79X.
Full Analysis
Nebius Group N.V. (NBIS) shares have surged 109.5% over the past six months, significantly outperforming peers like NVIDIA and Microsoft as well as broader market indices. The company is capitalizing on robust demand for AI infrastructure, with its Nebius AI business accounting for 98% of total revenues in the second quarter. Group revenues jumped 454% year-over-year to $582 million, driven by higher capacity utilization and an asset-light business model that includes recent acquisitions like Inferize. Profitability is improving alongside rapid expansion, with adjusted EBITDA reaching $236 million in Q2 compared to a loss of $21 million a year prior. Margins expanded to 41% from 32% in the first quarter due to early contributions from the asset-light model and acquisitions. The company has signed four major agreements averaging over $1 billion each, generating yields of $20-$25 million per megawatt with upfront payments covering 50%-60% of capital expenditures. Nebius is expanding its capacity pipeline, raising its year-end contracted power target to 5 gigawatts, with most expected to come online over the next three to three-and-a-half years. While the company relies on a mix of operating cash flow and financing to support substantial capital expenditures of approximately $5.7 billion in Q2 and an expected $20-$25 billion for full-year 2026, management notes that new capacity requires several months to commission before generating revenue. Despite strong growth prospects and improving fundamentals, NBIS trades at a price-to-book multiple of 5.69X, higher than the industry average of 3.79X but lower than peers like NVIDIA. Analysts suggest that while existing investors may hold given the strong demand and expanding pipeline, new investors might wait for a better entry point as much of the growth potential may already be reflected in the current stock price.