Nebius Raises $5.75B in Convertible Debt — But the Real Story Is in the Order Book

Nebius closes $5.75B convertible, upsizes twice, and lifts 2025 capex guidance to $20-25B as Q2 revenue jumps 454%.

The arithmetic of artificial intelligence infrastructure is brutal: to sell compute at scale, you first have to build it. Nebius is living that equation in real time, closing one of the largest financing rounds in its history just as its quarterly numbers land with a thud of hypergrowth.

Shareholders gave management their blessing at the August 25 annual meeting, approving every resolution on the table. The timing was fortuitous — the vote landed in the same week the company wrapped up a convertible bond placement that raised gross proceeds of $5.75 billion.

A Deal That Grew in the Telling

The offering was upsized twice before pricing. Originally slated for $4.5 billion, demand pushed the deal to $5 billion and then to its final size. The structure splits into two tranches: $3.45 billion in notes carrying a 0.50 percent coupon maturing in 2030, and $2.3 billion in notes at 4.50 percent due in 2034.

Alongside the pricing, Nebius exchanged $400 million of each of its outstanding 2029 and 2031 convertibles for roughly 15.8 million Class A shares. The combination of fresh debt and equity conversion briefly rattled the stock, which dipped 3.33 percent before recovering 1.8 percent since.

The capital isn't sitting idle. Nebius raised its full-year investment guidance to between $20 billion and $25 billion — a figure that explains the borrowing and underscores just how capital-intensive the AI cloud buildout remains.

The Operating Engine Behind the Raise

The financing isn't happening in a vacuum. Second-quarter revenue jumped 454 percent to $582 million, with the AI cloud segment growing even faster at 514 percent and now contributing 98 percent of group turnover. Adjusted EBITDA swung from a loss of $21 million in the year-ago period to a profit of $236.2 million.

More telling for the long-term thesis: the company signed four AI cloud contracts during the quarter, each averaging over $1 billion in total value. Management also ran its first capacity auction, fetching prices 15 percent above anything Nebius had previously commanded for Blackwell-generation compute. That pricing power, combined with a $40 billion order backlog, gives the company a visibility most competitors can only envy.

For fiscal 2026, Nebius reaffirmed its revenue outlook of $3.0 to $3.4 billion with an adjusted EBITDA margin around 40 percent.

Wall Street Splits on the Risk-Reward

The analyst community is divided on how to weigh the operational momentum against the execution risks. Goldman Sachs' Alexander Duval raised his price target from $286 to $328 on the same day as the annual meeting, maintaining a buy rating. But roughly a month earlier, D.A. Davidson had cut its target from $250 to $175, citing construction delays at the company's data center in Vineland, New Jersey.

Since that downgrade, the stock has recovered 13.2 percent — a sign the market has at least partially digested those concerns. The shares have also benefited from a partner platform model unveiled shortly after, which added nearly 10 percent to the stock within a month.

Still, the physical buildout remains the swing factor. Construction setbacks at a facility of this scale aren't a footnote when a company is guiding to the numbers Nebius has put on the table — they're a structural risk that could genuinely threaten the outlook.

A Valuation That Demands Fortitude

The stock last traded at €180.88, roughly 2.3 percent below its 50-day average of €185.10. That places it 31 percent under the 52-week high of €261.00 but still 238 percent above the year's low. With a market capitalization of €47.76 billion and annualized volatility of 158 percent, this is not a holding for the faint-hearted.

The convertible's dilution effects may not be fully priced in yet, even as the underlying business growth supports the medium-term valuation. The market's message seems to be one of cautious acceptance: the growth is real, the contracts are real, and the EBITDA is genuinely positive. But the cost of that pace — dilution from the convertible and delays in Vineland — is equally real.

Whether the trade works ultimately comes down to a simple operational question: can Nebius bring its data centers online fast enough to serve the demand it has created?