Nebius Shares Extend Gains on Robust Growth Outlook

Nebius Group stock extends rally as bullish analyst targets near $150 and ambitious 2026 revenue targets of $3B+ fuel investor optimism, despite a Q4 earnings miss.

The equity of Nebius Group N.V. continued its upward trajectory on Monday, advancing approximately 2% to $102.58. This move extends a powerful rally from the prior week, during which the stock had already surged more than 20%. The momentum is fueled by the company's latest quarterly report, an ambitious 2026 forecast, and a wave of positive analyst commentary.

Analyst Sentiment Turns Increasingly Bullish

The analyst community is growing more optimistic. On February 18, Compass Point initiated coverage with a "Buy" rating and a $150 price target. BWS Financial reaffirmed its own "Buy" recommendation, setting a target of $130. Earlier in February, Freedom Capital had already upgraded the stock to "Strong Buy."

According to data from MarketBeat, eleven analysts have issued ratings over the past twelve months: two "Strong Buy," seven "Buy," one "Hold," and one "Sell." The consensus price target stands at $143.22. A separate survey of eight analysts tracked by Public.com points to an average target of roughly $150.62.

Quarterly Results Miss Estimates, Yet Confidence Holds

Nebius presented its fourth-quarter 2025 figures on February 12. While revenue soared 547% year-over-year to $227.7 million—a 55% increase from the previous quarter—it fell short of the $246 million analysts had anticipated. The loss per share of $0.69 also exceeded the expected loss of $0.42.

Despite these misses, the report did not trigger significant selling pressure. Management clarified that the majority of new capacity came online only in late November, meaning its contribution to revenue was largely confined to December. Investors appeared far more convinced by the company's forward-looking indicators.

Capacity Expansion and Financial Model in Focus

Operational capacity reached 170 megawatts by year-end, significantly surpassing the original target of 100 MW. Annualized recurring revenue (ARR) jumped to $1.25 billion, marking a 127% increase quarter-over-quarter.

The company's financing model, highlighted in a Seeking Alpha analysis, is a key strength. In Q4, Nebius received approximately $830 million in customer prepayments. These funds support an aggressive capacity expansion strategy with reduced reliance on external capital markets.

Ambitious 2026 Targets Drive Investor Enthusiasm

For the full year 2026, Nebius is targeting revenue between $3.0 and $3.4 billion. Management expects ARR to grow to $7-$9 billion by the end of that year. Concurrently, the company raised its forecast for contracted capacity from over 2.5 gigawatts to more than 3 GW. Attached capacity is projected to be between 800 MW and 1 GW by the close of 2026.

A substantial backlog underpins these goals. Microsoft has signed a multi-year agreement worth $17-$19 billion through 2031, and Meta has secured $3 billion in capacity. The first tranche for Microsoft was delivered on schedule in November 2025, with additional tranches scheduled throughout 2026.

Underlying Demand Metrics Appear Strong

During the Q4 earnings call, executives noted that the number of contracts with terms exceeding twelve months nearly doubled compared to the third quarter. Average selling prices increased by more than 50%. The company's Hopper GPU capacity is effectively sold out, and contract renewals are being signed with improved terms and longer durations.

Heightened interest is also visible in the options market, where call volumes have significantly outpaced put volumes. The stock's implied volatility remains above its 52-week median.

Valuation Presents a High-Stakes Proposition

Even after the recent rally, valuation metrics remain demanding. Nebius commands a market capitalization of around $24.8 billion. Its price-to-earnings ratio exceeds 800, while the price-to-sales ratio sits near 47. The company reported a net loss for the fourth quarter, and its debt-to-equity ratio is 0.89.

Morningstar has expressed caution, noting the absence of a durable competitive moat and pointing to a multi-year period of anticipated significant cash outflows for data center construction and GPU procurement. The next quarterly results are expected in late April 2026.