Hook & thesis
Nebius Group is no longer just a build-and-borrow data-center story. New evidence that hyperscalers and large enterprise customers are underwriting capacity shifts the company's risk profile from capital-intensive execution risk toward contract execution and delivery risk. That matters: when customers finance capacity or sign long-term contracts with sizeable prepayments or take-or-pay commitments, the balance sheet and financing needs change materially.
Short version: Nebius trades at $100.70 with a $25.3 billion market cap. The company reported (and the market recognizes) a $1.25 billion annual run rate in 2025 and is guiding or being modeled by analysts for multi-billion revenue in 2026 thanks to a $20+ billion backlog and large hyperscaler deals (including a reported $3 billion contract with Meta). Those customer commitments reduce Nebius' capital risk and support a long entry at $101.00, a stop at $87.00, and a target of $135.00 over a long-term horizon (180 trading days).
Why the market should care
Nebius supplies AI-centric cloud infrastructure: large-scale GPU clusters, developer tools, and full-stack services. Its business matters now because hyperscalers and large enterprise AI users are pouring capital into GPUs and data-center capacity. Meta's decision to lift capex to $115-135 billion in 2026 (announced 02/23/2026) is a direct tailwind for Nebius, which already has a reported $3 billion contract with Meta and a backlog north of $20 billion. That changes the company's finance equation: instead of shouldering most upfront capex risk and market-rate project financing, Nebius can rely more on customer-backed commitments and contracted revenue streams that reduce both funding risk and cash burn volatility.
Supporting evidence and numbers
- 2025 momentum: Nebius achieved a $1.25 billion annual run rate in 2025 after exceeding guidance, up from $530 million in 2025 revenue projections cited earlier — a meaningful acceleration showing 6x year-over-year-type growth signals in public write-ups.
- Backlog and contracts: Multiple reports reference a $20+ billion backlog and large hyperscaler deals, including a $3 billion pact with Meta.
- Capacity plans: Management and analysts discuss expanding contracted data-center capacity to as much as 800 MW-1 GW and even 3 GW of contracted compute capacity in follow-up commentary — these scale plans underpin revenue models rather than speculative buildouts.
- Valuation context: Market cap stands at $25.3 billion with shares outstanding of 251.7 million and a price near $100.70. Reported trailing metrics show a high P/E (about 250x on reported metrics) and a P/B of ~5.52, indicating the market is pricing in steep future growth rather than current profitability.
- Technicals and market structure: Volume has been elevated (~8.88 million today; two-week average ~15.2 million), RSI sits in neutral at ~54, MACD shows bullish momentum, and short interest sits around 37.7 million shares with days-to-cover near 2.8 — a manageable short base but not negligible given headlines around sector financing.
Valuation framing
At a $25.3 billion market cap, investors are buying a story where Nebius captures large chunks of the AI infrastructure TAM and converts backlog into high-margin recurring revenue. The current P/E of ~250x implies that nearly all valuation rests on future revenue and margin expansion. That is expensive on face value, but not absurd if Nebius reaches the multi-billion-dollar revenue run rates being modeled by analysts for 2026 and later. For context, a 2026 revenue base of $3.4 billion (a figure used in analyst estimates) with improving margins would materially compress the forward multiple versus today.
Put differently: the market is valuing growth, not current earnings. The marginal question is execution: can Nebius convert backlog and hyperscaler contracts into steady cash flow without repeated capital raises? The shift toward customer-funded projects - either through prepayments, long-term take-or-pay contracts, or hyperscaler-backed financing - is the single biggest factor that would validate today's price.
Catalysts (what will move the stock)
- Hyperscaler capex ramp confirmation - further announcements from Meta or other large customers increasing committed spend would directly validate Nebius' contract pipeline and reduce funding concerns (Meta capex guidance was highlighted on 02/23/2026).
- Quarterly cadence - another quarter showing revenue acceleration beyond guidance (building on the $1.25 billion run rate beat) would reduce execution risk and support multiple expansion.
- Contract monetization - disclosures that backlog is tied to prepayments or non-recourse customer financing would materially reduce perceived leverage and the need for external capital.
- Site delivery milestones - bringing new sites online on schedule and within budget demonstrates ability to execute large-scale GPU deployments, improving margin visibility.
- Sector financing stabilization - evidence that funders and partners are willing to underwrite large projects again (following financing hiccups reported elsewhere in the sector) would lower the systemic premium the market applies to Nebius.
Trade plan
This trade is directional long with a clearly defined risk budget. The plan below assumes you believe customer-funded contracts materially reduce Nebius' capital risk and that near-term operational execution will prove out.
| Entry | Stop | Target | Horizon |
|---|---|---|---|
| $101.00 | $87.00 | $135.00 | Long term (180 trading days) |
Why these levels? Entry at $101 is near the current price and just above intraday volatility, making execution straightforward. The stop at $87 sits below the 50-day EMA band and provides room for normal post-earnings or headline noise while capping downside to a defined loss. The target at $135 approaches prior highs and reflects a scenario where Nebius converts backlog into revenue and the market re-rates the company closer to growth multiples rather than speculative multiple expansion. Expect the trade to be held for the long term (180 trading days) because converting backlog to cash receipts and recognizing large hyperscaler revenue typically plays out over several quarters.
Short-term and mid-term notes
If you want a quicker play, consider splitting size: a portion for short term (10 trading days) to capture immediate sentiment around an earnings/capex update, and the remainder for mid term (45 trading days) to monitor contract announcements and site delivery headlines. But the full thesis requires the longer 180 trading days to fully materialize.
Risks and counterarguments
- Execution risk: Scaling GPU farms at hyperscaler density is operationally hard. Delays, equipment shortages, or power procurement issues can push out revenue and raise costs.
- Financing contagion: Recent sector financing headwinds (reports of a partner failing to secure funds for a $4 billion project) show the market can quickly reprioritize liquidity concerns. If customers or financiers pull back, Nebius may still need equity or expensive debt.
- Customer concentration: Large contracts with hyperscalers are great when they pay, but they can create concentration risk. If one major customer delays or renegotiates, revenue and margin projections could collapse.
- Valuation sensitivity: At a P/E near 250x and P/B >5, Nebius needs near-perfect execution to justify full valuation. Any slip could trigger outsized downside.
- Competition and pricing pressure: Competitors such as other cloud-native GPU providers or in-house hyperscaler buildouts could pressure pricing and utilization.
Counterargument: A common bear case is that Nebius is already priced for perfection and that any capital-market disruption or execution miss will force dilution and multiple compression. That is plausible: the stock has rallied ~120% over the past year and trades significantly above earlier lows. But the structural change in financing - from company-funded builds to customer-funded or pre-contracted capacity - is a real variable that meaningfully reduces the probability of repeated dilutive raises. If customers are committing cash or providing take-or-pay guarantees, Nebius' need to access public equity decreases and tail risk from financing freezes narrows.
What would change my mind
I would exit or materially reduce the long if any of the following occur: (1) new disclosures show the backlog is mostly framework agreements without commercial commitments or prepayments; (2) a hyperscaler partner publicly scales back or cancels a $3 billion+ contract; (3) management signals that capital requirements will continue to require frequent equity raises; or (4) a material operational failure at one of the new sites increases projected capital costs and delays revenue conversion beyond a quarter or two.
Conclusion
Nebius sits at the intersection of a massive secular trend - AI-driven data-center demand - and near-term execution. The crucial inflection is the degree to which customers and hyperscalers underwrite capacity. If that trend persists, the company faces lower funding risk and a clearer path to converting backlog into cash flows. That outcome supports a disciplined long at $101.00 with a $87.00 stop and a $135.00 target over 180 trading days. However, the valuation assumes strong execution; expect volatility, read the quarterly cadence closely, and treat this as a high-risk growth trade rather than a core holding.