Nebius Stock: A Battle of Conviction at Record Highs

Nebius Group shares jump 9% after Cantor Fitzgerald's 'Overweight' rating. The AI infrastructure firm sees massive growth but faces skepticism over its $20B expansion plan and 20% short interest.

The shares of AI infrastructure provider Nebius Group surged over nine percent on Thursday, briefly touching $141 and closing at their highest level in weeks. This sharp move, fueled by a new "Overweight" rating and a $129 price target from Cantor Fitzgerald, highlights a market deeply divided. While a growing chorus of Wall Street analysts champions the stock, a significant bloc of investors is betting heavily against it.

Cantor Fitzgerald analyst Brett Knoblauch initiated coverage, citing Nebius's position as a full-stack AI cloud infrastructure platform. He pointed to the company's fully booked capacity in the fourth quarter of 2025 as clear evidence of robust demand, positioning it as a credible alternative to the major hyperscalers. This endorsement is the latest in a series of bullish calls that have propelled the stock 56% higher since the start of the year.

The analyst consensus is overwhelmingly positive, with an average price target of $164.54 and a range stretching up to $215. Major firms have established bullish stances: Bank of America and Compass Point have targets of $150, while Citigroup sees the stock reaching $169. Other notable targets include BWS Financial and DA Davidson, both at $200. Cantor's target sits at the more conservative end of this spectrum.

This optimism is rooted in staggering financial performance. Fourth-quarter group revenue skyrocketed 547% year-over-year to $227.7 million, driving the annualized revenue run rate (ARR) to $1.25 billion. Management's long-term targets are even more ambitious, aiming for an ARR between $7.0 and $9.0 billion by the end of 2026 with an adjusted EBITDA margin of 40%.

Achieving this scale requires monumental investment, which forms the core of the bearish thesis. Nebius has committed to spending $16 to $20 billion to build nine new data centers in the U.S. and EMEA regions. Capital expenditures ballooned to $2.06 billion in Q4 alone, up from $417.5 million a year earlier. The company reported a free cash flow burn of $1.22 billion for the quarter, and a recent $4.3 billion convertible note issuance has stoked fears of shareholder dilution.

These concerns have attracted substantial short interest, which stands at over 20% of the float. Skeptics also point to insider selling by the CEO and General Counsel, and a lingering overhang from the company's historical ties to Russia's Yandex, despite CEO Arkady Volozh having renounced his Russian citizenship.

The stock now sits just shy of its 52-week high of $141.10, a far cry from its 52-week low of $18.89. This vast distance underscores a fundamental shift in how the market perceives Nebius. The coming year will be decisive, testing the company's ability to execute its aggressive plan to expand connected data center capacity from 170 megawatts at the end of 2025 to up to one gigawatt by the close of 2026. Success would put immense pressure on short sellers, while any delays could validate their skepticism. For now, the stage is set for a volatile clash between growth believers and balance sheet critics.