Compass Point has opened coverage on Nebius Group (NASDAQ: NBIS), assigning a buy rating and setting a price objective of $150.00, according to a report released Wednesday. At the time of the report the shares were quoted near $97.52.
Despite the analyst enthusiasm reflected in the buy recommendation and the $150 target, company valuation metrics and recent operating results raise questions for some investors. The stock is described as trading significantly above InvestingPro's Fair Value estimate, a gap that the firm frames as a potential sign of overvaluation even as the new coverage signals confidence in Nebius's long-term prospects.
Nebius is headquartered in Amsterdam and positions itself as a full-stack AI infrastructure provider. The company sells GPU compute capacity together with its software stack via an AI cloud platform tailored for both training and inference workloads. That commercial profile places Nebius in the emerging market for AI compute services and related software tooling.
Market data referenced in the report highlights an extremely elevated price-to-earnings ratio of 855, a level that reflects market expectations for significant future growth. The same data also indicates the company is burning through cash at a rapid pace, a combination that increases sensitivity to execution and revenue trajectories.
The current corporate structure traces to a substantial divestiture of Russia-based operations. That divestiture closed in two tranches on May 17, 2024 and July 12, 2024. Previously, trading in the group that was listed as Yandex N.V. had been suspended on February 28, 2022. Trading on Nasdaq resumed under the Nebius name and the NBIS ticker on October 21, 2024.
The transaction that reshaped the company was valued at approximately $5.4 billion and produced roughly $2.8 billion in cash proceeds. The deal transformed the business into a Netherlands-based AI infrastructure platform. The report notes that much of the company's engineering culture originates from the legacy organization, even though the former Russia operating footprint was divested as part of the transaction.
On the results front, Nebius Group NV reported fourth-quarter 2025 revenue of $227.7 billion, which fell short of the $247.5 billion consensus forecast, amounting to a revenue surprise of -8%. The shortfall, despite the company's strong year-over-year growth metrics, prompted a negative market reaction. The earnings release and the revenue miss underline the difficulty the company faces in meeting market expectations and the sensitivity of investor sentiment to quarterly outcomes.
These developments - the initiation of coverage with an upbeat price target, the notable valuation premium over fair value estimates, the elevated P/E and rapid cash burn, and the recent revenue shortfall - are key inputs for investors evaluating Nebius. They will likely factor into future analyst assessments and any adjustments to recommendations as the company reports further results and outlines its execution path.
Key points
- Compass Point initiated coverage on Nebius with a buy rating and a $150 price target; shares were near $97.52 at the time of the report.
- Nebius operates an AI cloud platform selling GPU compute and associated software for training and inference, positioning it in the AI infrastructure market.
- Valuation and recent results present mixed signals: an 855 P/E and rapid cash burn alongside a fourth-quarter 2025 revenue shortfall of -8% versus expectations.
Risks and uncertainties
- Valuation risk: The stock is trading materially above a Fair Value estimate, indicating potential overvaluation relative to current fundamentals.
- Execution and liquidity risk: The company exhibits a very high P/E ratio and is burning cash rapidly, increasing reliance on growth to justify current valuations.
- Operational performance risk: A meaningful revenue miss in Q4 2025 raises uncertainty about the company's ability to meet market forecasts and maintain investor confidence.