On October 7, Rosenblatt analyst John McPeake initiated coverage of Nebius (NBIS) with a Buy rating and a $304 price target. He places Nebius just below CoreWeave (CRWV) at the top of the neocloud market. I’d go a step further. I’ve argued before that Nebius may be the best neocloud stock, even with Michael Burry betting against it.
One detail in Rosenblatt’s note stood out to me. Nebius doesn’t disclose how much power it has running, but the firm estimates it is roughly a sixth of CoreWeave’s 1.5 gigawatts. That gap explains a lot. As I covered earlier, Nebius has said it has four customers lined up for every GPU and turns away about 75% of demand. So the demand is clearly strong, and the limiting factor for Nebius has been how much capacity it can bring online.
That’s why a quiet deal from October 1 deserves more attention. Nebius acquired Inferize, a startup founded in January whose technology cuts the time AI models need to load and scale. While models load, the GPUs assigned to them sit idle, and platforms often keep spare chips running just to handle demand spikes. Nebius calls that wasted capacity the “idle GPU tax.” Inferize’s CEO said the team’s one goal is to serve more customer demand from every GPU.
When a company is turning away customers, every idle GPU is revenue lost. Building new data centers takes time, but getting more work out of the chips Nebius already owns can happen much faster. The deal won’t fix Nebius’ capacity shortage on its own, but it lets Nebius serve more customers while new data centers come online.
What Investors Are Really Paying For
Nebius’ stock is difficult to value on traditional measures. The forward non-GAAP P/E isn’t meaningful since Nebius isn’t profitable yet. The forward Price-to-sales ratio of 20.53x is steep, though it has no multi-year average to compare against. Analysts expect losses to widen in 2026 and 2027 as Nebius keeps spending to build capacity. Earnings should start improving in 2028.
The contracts make the case stronger for Nebius. The company holds about $37.5 billion in contracted future revenue, more than half its $68.49 billion market value. The balance sheet is not much of a concern. Nebius carries roughly $2 billion in net debt, far more manageable than CoreWeave’s net debt of around $46 billion.
Still, I think the price makes sense only if Nebius keeps adding capacity fast enough to serve the customers it’s turning away. The Inferize acquisition looks like a step in the right direction to help fix that.
Nebius reported its second-quarter fiscal 2026 earnings on August 12. Revenue climbed to $582.3 million from about $104.9 million a year earlier. This increase reflects rapid demand for AI infrastructure. Adjusted EBITDA reached $236 million, up from a loss of $21 million a year ago, showing a sharp turn in operating performance. This was one of the strongest quarters since becoming a public market story tied to AI infrastructure demand. The adjusted EBITDA margin for the quarter improved to 41% from 32% in the prior quarter. The company benefited from higher utilization, better infrastructure efficiency, new high-margin revenue streams and recent acquisitions.
Looking forward, Nebius reaffirmed its full-year 2026 guidance for group revenue of $3 billion to $3.4 billion, annualized run-rate revenue of $7 billion to $9 billion and adjusted EBITDA margin of about 40%. It also kept its capital spending guidance at $20 billion to $25 billion for 2026. The company expects year-end connected power of 800 megawatts to 1 gigawatt and raised its contracted power target to 5 gigawatts by the end of 2026.
About Nebius Stock
Nebius Group NV is a technology company that engages in building full-stack infrastructure to service the global AI industry in the US, UK and internationally. It provides cloud computing services, large-scale GPU clusters, and developer tools for AI applications. The company also owns TripleTen, an online technology education platform, and Avride, a developer of autonomous driving and delivery robot technology. Moreover, it has a strategic alliance with Nvidia to support the expansion of the company’s AI cloud infrastructure. Founded in 1989, the company is based in Schiphol, the Netherlands.