Nebius Group N.V.

(NASDAQ Global Select)
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Bullish +65

Rosenblatt Launches Nebius Stock Coverage With Buy Rating and Bold Price Target

AI infrastructure Analyst upgrade Capacity expansion AI-generated analysis

📈 Rosenblatt Securities initiated coverage with a Buy rating and set a price target of $304, ranking Nebius near the top of the neocloud group.

💰 Q2 revenue reached $582 million with AI services comprising 98% of total sales and adjusted EBITDA margins hitting 41%.

⚡ Management raised its year-end contracted power target to 5 gigawatts, up from previous guidance.

📈 Pricing power is evident as a recent capacity auction cleared at prices 15% above the highest price ever charged by the company.

💸 The company completed a $5.75 billion convertible debt deal in August to fund its rapid expansion plans.

🔮 Analysts project revenue growth of approximately 98% annually from fiscal 2026 through fiscal 2030.

⚠️ Investors should expect additional debt or equity raises as the company funds its aggressive capacity build-out.

💼 Nebius plans a new $4.5 billion convertible notes offering to support its growth strategy.

📉 The stock has already risen over 60% in six months, leading some analysts like InvestingPro to suggest potential overvaluation.

🏗️ Management reaffirmed 2026 guidance with revenue expectations between $3 billion and $3.4 billion.

Bullish Signals
  • Rosenblatt Securities initiated coverage with a Buy rating and a price target of $304, ranking the company near the top of the neocloud sector.
  • Q2 revenue hit $582 million with AI services making up 98% of total sales, demonstrating strong demand for its core product.
  • The company achieved an adjusted EBITDA margin of 41%, totaling $236 million in the second quarter.
  • Management raised its year-end contracted power target to 5 gigawatts on the earnings call, indicating robust growth trajectory.
  • Pricing power is strong as a recent capacity auction cleared at prices 15% above the highest price ever charged by Nebius.
  • The company successfully sold out of its available capacity, confirming high demand for its GPU services.
  • Customer prepayments are expected to bring in more than $9 billion this year, providing significant near-term cash flow.
Risk Factors
  • The stock has appreciated over 60% in the last six months, leading some analysts to suggest the shares may be overvalued.
  • Investors should expect Nebius to raise more debt or equity to fund its expansion, which could dilute existing shareholders.
  • The company plans a $4.5 billion convertible notes offering, indicating a continued need for external capital to support growth.
Full Analysis
Rosenblatt Securities initiated coverage on Nebius (NBIS) with a Buy rating and a price target of $304, ranking the company near the top of the neocloud sector alongside CoreWeave. The firm's valuation model projects revenue growth of approximately 98% annually from fiscal 2026 to 2030, utilizing a 12% discount rate and a terminal multiple of 12x free cash flow. Analysts note that while the business fundamentals are strong, the stock has already appreciated significantly over the last six months. Nebius reported robust financial performance in the second quarter with revenue reaching $582 million, where AI services accounted for 98% of total sales. The company achieved an adjusted EBITDA margin of 41%, totaling $236 million, and successfully sold out its available capacity. Management raised its year-end contracted power target to 5 gigawatts on the earnings call, highlighting strong demand and pricing power evidenced by a recent capacity auction clearing at prices 15% above historical highs. Despite the positive outlook, funding remains a critical area of focus for investors as the company plans further expansion. Nebius expects customer prepayments to exceed $9 billion this year but anticipates raising additional debt or equity to fund its growth trajectory. The company has already completed a $5.75 billion convertible debt deal in August and plans a new $4.5 billion convertible notes offering, signaling that stockholders should expect further capital raises to support its aggressive scaling.