Nebius Stock: The High-Stakes Push Beyond Pure Infrastructure

Dutch AI cloud provider Nebius is in talks to buy AI21 Labs, following Jim Cramer's endorsement and massive revenue growth. The deal aims to add enterprise AI software to its expanding infrastructure.

A potential acquisition and a celebrity endorsement have put Dutch AI cloud provider Nebius back in the spotlight. The company is reportedly in talks to acquire Israeli AI startup AI21 Labs, according to The Information. This move follows a significant vote of confidence from CNBC host Jim Cramer, who recently advised investors to "stay close" to Nebius, labeling it part of his "data center of the future" category. His comments helped propel the stock 4.32% higher to $117.40 in Tuesday's regular session.

The pursuit of AI21 Labs marks a strategic pivot. Founded in 2017, the Israeli firm has shifted its focus squarely to enterprise clients, offering language models and AI productivity solutions after discontinuing its consumer product, Wordtune. With an estimated annual revenue of $50 million and a workforce of 200, AI21 Labs was last valued at $1.4 billion in 2023. Previous discussions with Nvidia had reportedly pegged its worth between $2 and $3 billion. For Nebius, the acquisition would add a ready-made enterprise software layer, a component currently missing despite its own LLM team and the Nebius AI Studio inference platform.

This would be Nebius's second deal this year, following its February purchase of AI search engine Tavily. Co-founder Roman Chernin articulated the broader ambition at the time: “We are not just an Infrastructure-as-a-Service company — we are building the complete platform for anyone developing AI products, agents, or services.”

The company's financials paint a picture of explosive, capital-intensive growth. Fourth-quarter 2025 revenue skyrocketed 547% year-over-year to $227.7 million, while adjusted EBITDA turned positive at $15 million. However, the GAAP net loss widened to $249.6 million and capital expenditures jumped to $2.06 billion, primarily for AI processors and new data centers. The adjusted net loss also expanded significantly, by approximately 151% to $173 million.

Massive capacity contracts underpin this aggressive expansion. Nebius has secured deals with Microsoft and Meta worth a combined $46 billion, with the individual contracts valued at $19.4 billion and $12 billion, respectively. These two tech giants alone account for roughly 60% of the company's signed backlog. A strategic $2 billion investment from Nvidia further bolsters its war chest. The goal is to increase data center capacity from 170 megawatts to between 800 megawatts and 1 gigawatt by the end of 2026, a five to sixfold increase. Management targets annualized revenue of $7 to $9 billion, with more than half already under contract.

Despite the 485% stock surge over the past twelve months, significant risks loom. A substantial short interest of over 40 million shares, representing about 20% of the float, fuels skepticism. The company's rapid scaling is vulnerable to delays; any hiccups in capacity build-out could push revenue realization into 2027 or 2028. Furthermore, it faces potential pricing pressure from cloud giants AWS, Azure, and Google's own TPU initiatives. While Nebius holds $3.7 billion in liquid assets, this buffer could shrink quickly given the intense investment pace.

Recent insider sales have drawn attention but appear routine. CEO Arkadiy Volozh sold 33,358 shares at an average price of $103.73, and Chief Infrastructure Officer Andrey Korolenko sold 26,976 shares at $98.78. SEC filings indicate these were automatic sales of vested Restricted Share Units solely to cover tax obligations, not discretionary trades.

Analyst sentiment remains largely positive. Of 13 covering the stock, two rate it a "Strong Buy," nine a "Buy," one a "Hold," and one a "Sell." The average price target stands at $157.09. BWS Financial raised its target to $200 in March, while Bank of America initiated coverage late that month with a $150 target. Financial terms for the potential AI21 Labs deal are not yet public. In pre-market trading Thursday, following the acquisition report, Nebius shares dipped approximately two percent.