Nebius Surges on French AI Hub and Nvidia Endorsement, Yet BNP Paribas Flags Valuation Risk

BNP Paribas initiates Nebius at Neutral, $255 PT, noting 200% rally prices in growth. Catalysts: French AI data centre, Nvidia backing, $27B Meta deal. Caution on capex gap, insider selling.

BNP Paribas kicked off its coverage of Nebius Group on June 2 with a Neutral rating and a $255 price target, signalling that a 200%-plus rally since the start of the year has already priced in much of the growth story. The cautious initiation comes just as the company’s shares touched a new high, lifted by a string of high-profile catalysts — from a sprawling French AI data centre to a public nod from Nvidia’s Jensen Huang.

President Emmanuel Macron used the “Choose France” summit on June 1 to tout Nebius’s plans for a 240-megawatt AI facility in Béthune, a former Bridgestone tyre plant. The company is sinking more than €8 billion into cloud infrastructure and services in the country, partnering with Azur Datacenter and creating around 120 direct jobs. The first 60-megawatt phase is scheduled to go live in summer 2026. Macron also flagged total AI investment commitments from SoftBank and Nebius of €53 billion ($61.7 billion), with France’s nuclear-heavy power grid a key draw for energy-hungry data centres.

The political backing was followed by a powerful commercial endorsement. Speaking at Computex in Taiwan, Huang singled out Nebius as a selected provider of “world-class AI clouds”, name-checking customers such as Cursor, World Labs, Revolut and Shopify. He also positioned Nebius — alongside Microsoft and CoreWeave — as an early adopter of Nvidia’s Vera Rubin architecture.

The operational numbers justify the excitement. First-quarter revenue reached $399 million, a 684% jump from a year earlier. The core AI Cloud segment contributed $389.7 million, surging 841%. Adjusted EBITDA swung to a positive $129.5 million, and profit from continuing operations hit $621 million, reversing a $104 million loss in the prior-year period. Management’s target for an annualised revenue run-rate of $7 billion to $9 billion by year-end underlines the scale of the ambition.

Big-ticket contracts provide the runway. Nebius has a multi-year agreement with Meta worth up to $27 billion, comprising $12 billion in firm capacity and up to $15 billion in optional compute over five years. A separate deal with Microsoft runs to $19.4 billion. Capacity deliveries under both contracts are expected to begin in the second half of 2026. On the energy front, a long-term partnership with Bloom Energy could generate up to $2.6 billion in service fees, initially backing 328 megawatts of capacity.

But the growth engine runs on vast sums of capital. Nebius spent $2.47 billion on property, plant and equipment in the first quarter and ended March with $9.3 billion in cash. For the full year, it now plans to invest $20 billion to $25 billion, up from the earlier $16 billion to $20 billion range. That leaves a funding gap of $4 billion to $5 billion, fuelling speculation of a capital increase.

Insider selling adds another layer of caution. CEO Arkadiy Volozh sold 33,358 shares in April at an average price of $103.73, trimming his stake by 3.7%. Director Elena Bunina offloaded 10,894 shares in May at $206.87, reducing her position by more than half. Over three months, total insider disposals reached $123.5 million.

The stock’s reaction to the France announcement was exuberant: a 14.5% leap on June 1 to a new year-to-date high, with more than 24 million shares changing hands. The following session saw it trade between $260.66 and $282.65 before closing at $262.23. Citigroup’s $287 target and Citizens JMP’s $270 target suggest that analysts, like BNP Paribas, see little further upside from here. For Nebius, the immediate question is whether it can deliver the promised AI capacity on time — and at what cost the next round of financing will come. The growth story is real, but so is the capital hunger.