Nebius Closes $5.75B Convertible, Lifts 2026 Capacity Target to 5GW — and the Market Is Still Weighing the Dilution Trade-Off

Nebius secures $5.75B in convertible notes and shareholder approval to fund AI infrastructure expansion, raising 2026 capacity target to 5GW.

Nebius has spent the past week doing two things at once: pulling in a record amount of growth capital and quietly securing the shareholder mandate to deploy it. The Amsterdam-based AI infrastructure player closed a $5.75 billion private convertible note placement on Monday, with initial purchasers exercising their full greenshoe options, then sailed through its annual general meeting the following day with every resolution approved. For a company whose stock has swung violently in both directions over the past month, the 48-hour stretch was a reminder that the operational story is moving faster than the share price.

The convertible, originally sized at $5 billion when priced on August 19, was ultimately upsized to $5.75 billion after investors took down all available additional allocation. The issuance is split into two tranches: $3.45 billion in notes carrying a 0.50% coupon and maturing in 2030, and $2.3 billion in notes at 4.50% due in 2034. In a related move, Nebius exchanged $400 million each of its older 2029 and 2031 notes for roughly 15.8 million new shares.

That capital is earmarked for data center expansion, GPU procurement, and the company's AI cloud platform — the same areas underpinning Nebius's revised capacity outlook. Management now targets more than 5 gigawatts of contracted power capacity by 2026, up from a prior goal of over 4 gigawatts, and expects to add more than 1 gigawatt annually from 2027 onward. The company also aims to deploy 800 megawatts to 1 gigawatt of capacity by the end of this year.

The financing math is straightforward: Nebius is pre-funding a capital-intensive buildout to convert roughly $40 billion in customer commitments into actual revenue. The company reported second-quarter cloud revenue of $582.3 million, up 514% year over year and ahead of the $572.75 million consensus estimate. Four AI cloud deals each exceeding $1 billion in contract value are on the books, and total contracted volume has nearly quadrupled. Customers have also provided over $9 billion in prepayments for 2026.

A shareholder base that's on board — for now

The smooth passage of all AGM resolutions on Tuesday might read as procedural, but it carries weight given the context. Nebius is simultaneously absorbing billions in new debt and issuing equity-linked instruments that could dilute existing holders if conversion becomes attractive. That shareholders waved through management's agenda signals the ownership structure is willing to tolerate near-term volatility for the longer-term expansion story.

That volatility has been pronounced. The stock traded at €184.86 on the day of the AGM, down 2.9% from the prior close of €190.28, though still roughly 152% above its level at the start of the year. Earlier in August, the shares had fallen about 20% in five days after a mid-month peak, and a separate stretch saw six consecutive sessions of declines totaling around 24% before stabilizing. The whipsaw pattern reflects a market trying to price a company in the middle of a fundamental transformation — trading expectations of future capacity rather than trailing results.

The bull case: balance sheet strength and anchor customers

Optimists point to a combination of liquidity and demand that few peers can match. Nebius holds roughly $8 billion in cash with minimal debt relative to competitors — CoreWeave, by contrast, saw interest expenses hit $640 million in the second quarter alone. The customer roster includes Microsoft with contracts worth up to $19.4 billion and Meta with up to $27 billion over five years. Nvidia's stake has grown to 9.3%, backed by a $2 billion investment plus warrants, and Soros Fund Management accumulated around 310,000 shares in the second quarter.

On the technology front, Nebius claims to be the first AI cloud offering the NVIDIA Groq 3 LPX, which the company says achieved 3,400 output tokens per second in benchmarking — a figure it describes as unprecedented. Analyst consensus sits at "Moderate Buy" with a price target of $282.85, while Bank of America raised its target to $310 from $280 on August 13 following the Q2 print, reaffirming a buy rating.

The bear case: valuation leaves no room for stumbles

The other side of the ledger is equally visible. Nebius trades at a price-to-earnings ratio of roughly 840 and a price-to-sales multiple of 43.8x — levels that leave little margin for disappointment. The new debt adds future interest obligations, even if the 2030 tranche's 0.50% coupon looks manageable. And the competitive landscape is intensifying: hyperscalers including Alphabet, Amazon, and Microsoft are planning combined capital expenditures of $750 billion to $770 billion for 2026, with Goldman Sachs projecting that more than a third of AI investment will be debt-financed from 2027 onward. RUM Group has also announced a $13.7 billion GPU contract it says will challenge both CoreWeave and Nebius.

Should GPU demand grow more slowly than industry-wide supply, pricing pressure and overcapacity could hit capital-intensive providers hardest. The core question is whether Nebius can bring contracted capacity online quickly enough to convert its commitments into actual utilization — and whether the 5-gigawatt target and the deployment pace hold up under scrutiny.

What to watch next

The immediate test of industry sentiment comes Wednesday with Nvidia's quarterly report, whose data center demand outlook will likely ripple across the AI infrastructure complex. Thursday brings earnings from IREN, which could serve as another read on neocloud capacity demand.

For Nebius, the week's twin events — the closed convertible and the uncontested AGM — have set the stage. The company has the capital, the contracted demand, and the shareholder backing. What remains to be proven is whether it can execute the buildout at the promised speed. That execution gap is where the stock's next major move will be decided.