Nebius Turns a Profit as $25 Billion Infrastructure Bet Gathers Pace

Amsterdam-based Nebius Group reported adjusted EPS of $2.11, beating expectations, and revenue of $399M, up 684% YoY. Stock jumped 20% to a 52-week high.

The Amsterdam-based cloud operator Nebius Group has delivered a quarter that rewrites the narrative around its business model. Instead of merely narrowing losses, the company posted adjusted earnings of $2.11 per share for the first three months of 2026 — a result that smashed consensus expectations of a $0.78 per-share deficit and sent the stock surging roughly 20% in intraday trading to a fresh 52-week high of around $215.50.

Revenue for the period hit $399 million, a 684% jump from the same quarter last year and ahead of the $375 million analysts had penciled in. Almost the entire top line — $389.7 million — came from the Nebius AI Cloud segment, where revenue exploded 841% year-on-year. The operating momentum is now so pronounced that management lifted full-year 2026 revenue guidance to a range of $3.0 billion to $3.4 billion, with an annualised run-rate target of $7 billion to $9 billion by year-end.

Profitability Arrives Earlier Than Expected

The sharp improvement in earnings is the standout detail. Adjusted EBITDA swung from a loss of $53.7 million in the year-ago period to positive $129.5 million, yielding a segment margin of 45% — up from 24% in the prior quarter. The adjusted net loss on a group level narrowed to roughly $100 million, also beating expectations. The company now expects to remain in the red through 2027, but the speed at which the core cloud business has turned profitable suggests the path to group profitability could shorten if the growth trajectory holds.

To fund that expansion, Nebius has amassed a war chest. Cash and equivalents stood at $9.3 billion at the end of March, boosted by $4.3 billion in convertible notes and a $2 billion strategic investment from Nvidia earlier this year. The capital is already being deployed at breakneck speed: first-quarter capital expenditure came in at roughly $2.5 billion, versus $544 million a year earlier. For the full year, the company has raised its capex target to between $20 billion and $25 billion — a figure that dwarfs current revenue and underscores the immense financial commitment required to compete as a so-called "AI-native hyperscaler."

Expanding Capacity and Distribution

Much of that spending will go toward new data-centre campuses. In Pennsylvania, Nebius has secured land and 1.2 gigawatts of power for a company-owned AI factory, complementing an earlier mega-project in Missouri. Contracted power capacity has already surpassed 3.5 GW, exceeding the original 2026 target of 3 GW. The company now expects to reach more than 4 GW by the end of the year. Actual operational capacity is forecast to reach between 800 MW and 1 GW within the year.

On the commercial front, a new distribution partnership with TD SYNNEX marks a strategic shift away from pure direct sales. The IT distributor will embed dedicated Nvidia clusters from the Nebius cloud into its own offering, giving the Dutch firm access to a global reseller network of roughly 150,000 enterprise customers. It is a move that should help convert the massive pipeline of demand — which management says continues to outstrip supply — into recurring revenue.

Wall Street Divided on Valuation Risk

The market has already priced in a lot of the optimism. Nebius now trades at roughly 16 times forward revenue, with a market capitalisation exceeding $52 billion. Analysts at Bank of America reiterated a buy rating and lifted their price target from $175 to $205, citing the accelerating revenue trajectory. But Wolfe Research struck a more cautious note, pointing to execution and financing risks tied to the enormous construction programme. The firm’s fair-value estimate for the stock spans a wide range of $80 to $170, a gap that reflects the uncertainty around whether the company can deliver on its infrastructure promises without delays, dilution, or cost overruns.

Short sellers, who had built a position equivalent to more than 20% of the free float, were caught off guard by the earnings surprise, adding an extra kick to the share-price move. For Nebius, the challenge now is to sustain that momentum: the valuation leaves no room for missteps, but the quarter proved that when execution aligns with ambition, the market is willing to pay a premium.