Nebius Prepares for Earnings With a $205 BofA Target and a $20 Billion Infrastructure Gamble

With a $50B order backlog and $16B+ capex plan, Nebius's Q1 earnings will test its ability to turn pre-sold AI capacity into predictable revenue and address funding gap.

Bank of America has thrown its weight behind Nebius just days before the company’s first-quarter earnings release, lifting its price target to $205 from $175 and reaffirming a buy rating. With the stock trading around $177, the call implies roughly 16% upside — but the real story lies in whether Nebius can convert a staggering order backlog into predictable revenue.

The numbers are eye-catching. Nebius has built a contracted order volume approaching $50 billion, anchored by a five-year deal with Meta Platforms worth $27 billion for dedicated AI infrastructure capacity, and a multiyear agreement with Microsoft valued at up to $19.4 billion. Nvidia has also stepped in with a $2 billion investment, underscoring the strategic importance of specialised computing for AI training and inference. The company’s market capitalisation stands at roughly $45 billion, while its price-to-earnings ratio of 364 reflects growth expectations rather than current profitability — the five-year median is around 28.

Yet the financing puzzle remains central. Management has flagged capital expenditure of $16 billion to $20 billion for 2026, with about 60% covered by existing cash, operational inflows and customer pre-payments. The rest will need to come from debt and equity, making the earnings call on 13 May a critical moment for investors seeking clarity on the funding gap. A significant portion of planned capacity is already pre-sold, which signals robust demand, but execution risk looms large: Nebius aims to reach between 800 megawatts and 1 gigawatt of connected capacity by year-end, a target that requires timely delivery.

The acquisition of Eigen AI for roughly $643 million adds another layer. The deal is intended to bolster Nebius’s token-factory platform and move the company closer to engineering and research teams in the Bay Area. Combined with existing partnerships, the move underscores a push toward vertical integration as Nebius positions itself as a cloud provider with data centres in both Europe and the US, targeting more than 3 gigawatts of contracted power by the end of 2026.

Revenue guidance for the full year sits at $3.0 billion to $3.4 billion — a dramatic leap from $530 million in fiscal 2025. The company also targets an annualised recurring revenue run rate of $7 billion to $9 billion by year-end, a pace that will demand near-flawless execution. Wednesday’s numbers will provide the first hard check against that plan, with particular focus on utilisation rates, delivery timelines, capital requirements and the speed of data centre buildout. Strong demand alone won’t suffice; Nebius must demonstrate that pre-sold capacity translates into predictable earnings.