Nebius Faces $25 Billion Capex Crossroads as Growth Explodes and Insiders Cash Out

Nebius shares surge 5x on 841% AI cloud revenue growth, but institutional investors diverge ahead of a massive $25B capital spending plan and $46B backlog.

The rally in Nebius shares has been nothing short of spectacular — the stock has quintupled over the past twelve months. But behind the headline numbers, a sharp divide is emerging. Large institutional investors are taking radically different positions, some loading up on shares while others book profits, just as the AI infrastructure company unveils a capital spending plan that could stretch to $25 billion.

CloudAlpha Capital Management added more than 380,000 shares in the latest period, and DNB Asset Management also increased its stake, betting on the so-called "neocloud" segment. In the opposite corner, Greenwoods Asset Management dumped roughly 638,000 shares and Investment House trimmed its holdings. The split follows an analyst downgrade that cited valuation concerns — but not any operational weakness, according to the reports.

Cloud Revenue Triples on 841% Surge

The operational picture, in fact, looks strong. Nebius generated $399 million in revenue during the first quarter, up from barely $51 million a year earlier. The growth is overwhelmingly driven by its AI cloud business, which expanded 841% and now accounts for almost all of the group's revenue. On an adjusted basis, the company swung from an operating loss to a profit of $129.5 million.

The annualized revenue run rate reached $1.92 billion at the end of March, easily beating analyst expectations. That helped trigger a wave of price-target upgrades from Wall Street, though the forecasts are now scattered widely. Citigroup's Tyler Radke lifted his target 70% to $287, praising strong demand and higher GPU pricing. Citizens' Greg P. Miller went to $270, highlighting Nebius' control over its own data centers and power supply. Morgan Stanley, however, raised its target to just $144, well below the current trading level around $190, and stuck with an Equal-weight rating.

$46 Billion Backlog Backed by a Gigawatt-Scale Pipeline

The company's contract pipeline reinforces the growth story. Nebius has secured power capacity agreements exceeding 3.5 gigawatts, with management targeting 4 gigawatts by the end of its fiscal year 2026. A new AI facility in Pennsylvania alone is expected to contribute up to 1.2 gigawatts, underpinning a total backlog of $46 billion. Long-term agreements with tech giants including Meta and Microsoft lock in revenue through at least 2030.

But building that infrastructure carries a staggering price tag. Capital expenditures in the first quarter hit $2.5 billion, up from just $544 million the year before. For the full year, the board raised its budget to as much as $25 billion — an enormous sum for a company that still reports a net loss. On an adjusted basis, the net loss widened to $100 million in the first quarter.

Cash Buffer and Nvidia Stake Provide Cushion

Nebius finished the quarter with more than $9 billion in cash, partly thanks to fresh capital raised in the period. Among the new investors, Nvidia took a multibillion-dollar equity stake, adding a powerful strategic endorsement. The balance sheet offers a solid buffer for now, but the high capital intensity is squeezing near-term margins.

Management is sticking with its full-year revenue forecast of up to $3.4 billion, and the medium-term target for an adjusted EBITDA margin of roughly 40% remains intact. Financial analysts expect the earnings weight to shift heavily into the second half of the year, as new capacity in the U.S. and Europe comes online and begins generating revenue.

With a market capitalization around $55 billion, Nebius trades at roughly 17 times expected 2026 sales. The company now has to prove that its massive upfront investment in data centers will actually deliver on those ambitious revenue goals — a test that has both bulls and bears digging in.