Nebius Stock Finds Its Footing Following Recent Decline

Nebius shares recover as Meta's $115B+ AI spend and a $232 price target from Northland Securities boost confidence, despite recent volatility from a Q4 revenue miss.

After a sharp sell-off on February 20th, shares of Nebius demonstrated notable stabilization in the trading sessions on February 23rd and 24th. This recovery appears to have been fueled by a dual catalyst: a significantly increased price target from Northland Securities and renewed market enthusiasm stemming from Meta Platforms' planned multi-billion dollar investments in AI infrastructure. The central question for investors now is whether this newfound confidence can withstand the volatility that has characterized recent weeks.

Meta's Spending Plans Provide a Tailwind

A significant positive impulse arrived from Meta Platforms. The tech giant indicated it expects capital expenditures for 2026 to reach between $115 billion and $135 billion—a surge of approximately 74% over the prior year. A substantial portion of this investment is earmarked for Nvidia GPU capacity, which is expected to be sourced partly through cloud partner networks where Nebius is an active participant.

Nebius has already established concrete contractual agreements in this sphere. In November 2025, the company signed a five-year, $3 billion contract with Meta. This is complemented by a multi-year agreement with Microsoft valued at over $19 billion. Collectively, these deals underpin a reported backlog exceeding $22 billion.

Analyst Sentiment and a Lofty Price Target

Adding to the positive momentum, Northland Securities revised its outlook on Nebius yesterday. The firm raised its price target to $232 from $211, while maintaining an "Outperform" rating. This new target is currently the highest publicly known analyst estimate for the stock, according to data services.

Broader analyst consensus remains favorable though mixed. The average rating stands at "Moderate Buy," with an average 12-month price target of $143.22. The distribution of recommendations includes two "Strong Buy," seven "Buy," one "Hold," and one "Sell."

Quarterly Results and Ongoing Volatility

The stock's recent fluctuations are also tied to the Q4 2025 earnings report released on February 12th. While quarterly revenue jumped to $227.7 million—a 547% year-over-year increase—it fell short of expectations of approximately $246 million. For the full year 2025, the company reported revenue of $529.8 million, up 479%.

A key positive was the annualized run-rate (ARR), which reached $1.25 billion by the end of 2025, surpassing the company's own target range of $900 million to $1.1 billion. On profitability, Nebius reported an adjusted EBITDA of $15.0 million for Q4, marking its first quarter of positive adjusted EBITDA at the group level.

However, the revenue miss and the 2026 outlook weighed on investor sentiment. The company's revenue forecast for 2026 is $3.0 to $3.4 billion. On February 20th, shares declined 9% to $97.92 on elevated trading volume of 17.2 million shares. Broader pressure on AI infrastructure stocks, including mentions of CoreWeave and Iren amid tariff concerns, also contributed to the decline.

Aggressive Capacity Expansion Continues

Despite the short-term disappointment on revenue timing, Nebius continues to pursue an aggressive expansion strategy. According to a shareholder letter, the company ended 2025 with approximately 170 megawatts of active power capacity, significantly exceeding its original target of 100 MW. Furthermore, nine new data center locations across the U.S. and EMEA regions were announced.

Management has increased its target for contracted power capacity to over 3 gigawatts by the end of 2026, up from a previous goal of 2.5 GW. On the earnings call, the CFO stated that deployments for Meta went live in early February. The Microsoft contract is expected to provide a more substantial revenue boost in the second half of 2026.

This aligns with the company's investment framework: Nebius has planned capital expenditures of $16 to $20 billion for 2026.

The next quarterly report is scheduled for April 29th. This update will be crucial in showing whether Nebius can convert its contracted capacity into recognized revenue at the pace the market is anticipating, given its ambitious expansion plans and current valuation.