Nebius Charts a Dual-Path to Dominance: Software Acquisitions and a $25 Billion Infrastructure Bet Pay Off in Record Quarter

Nebius posts 684% revenue jump to $399M, swings to EBITDA profit, and lifts capex target to $25B as it scales AI infrastructure and software capabilities.

The Nebius Group has delivered a financial performance that left even the most bullish forecasts in the dust, posting a 684% surge in first-quarter revenue to $399 million and swinging from a year-ago EBITDA loss of $54 million to a profit of $129.5 million. The inflection point validates a high-risk strategy: while the hyperscaler pours tens of billions into new data centers, it is simultaneously pivoting toward higher-margin software and complex AI workloads.

Annualized recurring revenue from the AI cloud business jumped to $1.92 billion by the end of March, up from $1.25 billion in December 2025. The company’s AI segment alone grew 841% year over year, underscoring the insatiable demand for Nvidia-powered compute clusters that Nebius leases out to enterprise customers.

Management sees this as just the opening act. During the quarterly presentation on May 13, the company raised its capex target for the current fiscal year to between $20 billion and $25 billion, up from a previous ceiling of $20 billion. The move is designed to lock in capacity for projected demand in 2027, with the bulk of future output already covered by firm customer commitments.

To support that build-out, Nebius is racing to secure power. The target for contracted electricity capacity now exceeds 4 gigawatts by the end of 2026, of which roughly 3.5 GW is already under contract. Owned data centers account for more than three-quarters of that space. New construction is underway in Missouri, Alabama, and a recently secured site in Pennsylvania that can deliver up to 1.2 GW of power. These facilities are expected to come online next year.

But building concrete and cooling towers is only half the story. Nebius is aggressively moving up the stack. Recent acquisitions of Eigen AI and Clarifai bring specialized talent in inference optimization and AI model management, allowing the company to target more complex processing jobs rather than simply renting out raw GPU capacity.

The financial firepower for this dual-track strategy is substantial. In March, Nebius completed a $4.3 billion private placement of convertible bonds. The company now plans to raise additional debt in the single-digit billions in the near term, supplementing customer prepayments and an unused equity issuance program.

Wall Street has responded with a flurry of analyst upgrades. Bank of America raised its price target to $240, Northland to $248, DA Davidson to $250, and Citizens to $270—a dramatic jump from its prior $175 target. Goldman Sachs maintained a buy rating with a $205 price objective. The lone dissenter was Freedom Capital, which downgraded the stock from “Strong Buy” to “Hold” in April, citing the lofty valuation at nearly 16 times forward sales.

The bullish sentiment was further fueled by a new distribution partnership with TD SYNNEX, which gives Nebius broader access to corporate customers for its Nvidia-based AI clusters. The stock hit an all-time high above $220 on the Nasdaq following the announcement.

With a market capitalization of roughly $52 billion and an investment program that dwarfs that figure, the execution risk is considerable. Yet the company’s ability to flip from operating losses to a $129.5 million EBITDA profit in one year has convinced many that the capacity constraints afflicting the AI infrastructure market are translating directly into pricing leverage and recurring revenue growth.