Nebius Lifts Capex Ceiling to $25 Billion as Google-Blackstone Cloud JV Shakes Sentiment

Nebius raises capex to $25B, revenue surges 684% to $399M, but Blackstone-Google JV sparks 6.6% stock drop; adjusted EBITDA turns positive.

Nebius is pushing its infrastructure build-out into overdrive, raising its investment budget for this year to as much as $25 billion from a previous cap of $20 billion. The reason is straightforward: demand for AI cloud capacity is so voracious that every new megawatt built sells out immediately, according to CEO Arkady Volozh. The company now expects to have more than 4 gigawatts of contracted capacity by the end of 2025, up from the earlier target of 3.5 GW and already ahead of schedule.

Yet even as Nebius races to satisfy customers, a new competitive dynamic is rattling investors. Blackstone and Google announced a $5 billion joint venture to build cloud infrastructure based on Google’s TPU chips, threatening to add heavyweight capacity to a market where scarce computing power has commanded premium pricing. Nebius shares tumbled 6.6% to $186.63 on the news, with some intraday indications pointing to declines of as much as 9%. The sell-off, while sharp, largely reflects a reassessment of pricing power rather than a deterioration in Nebius’ own growth trajectory.

The first-quarter numbers underscore why the company is doubling down. Total revenue hit $399 million, a 684% surge year-on-year, with the AI cloud segment contributing $390 million of that haul – a 841% jump in its core business. Even more striking is the profitability pivot: adjusted EBITDA swung from a loss of $53.7 million to a positive $129.5 million, yielding a margin of 45%. That compares with just 24% in the prior quarter. Reported earnings per share of $2.11 were flattered by a $780.6 million non-cash gain from the ClickHouse stake, but the adjusted loss of $0.23 per share still beat expectations.

Nebius’ order book provides extraordinary visibility. The contracted pipeline is pegged at $46 billion to $50 billion, anchored by a huge Meta agreement and infrastructure deals with Microsoft. To turn that pipeline into revenue, Nebius is building its own factories rather than solely leasing capacity. Sites in Missouri (1 GW), Pennsylvania (1.2 GW), and Alabama are under development, with total contracted power now exceeding 3.5 GW. The company has also been snapping up software assets – Tavily, Eigen AI, and Clarifai – to bolster its platform’s data processing and search capabilities.

The balance sheet can support the spending spree, but leverage is growing. Nebius ended the quarter with $9.3 billion in cash and $8.4 billion in long-term debt. Volozh highlighted that with the federal funds rate at 3.75%, infrastructure financing remains a meaningful cost – a factor that could pressure margins if the Google-Blackstone venture accelerates supply growth.

Wall Street is divided on valuation. D.A. Davidson downgraded the stock from Buy to Neutral on May 18, flagging risks after the recent rally. Citigroup, by contrast, maintains a price target of $287, signaling confidence in Nebius’ ability to execute. The next major test comes around August 6, when second-quarter results are due. Management has guided for a revenue run rate of $7 billion to $9 billion by the end of 2026, a target that will require flawless execution amid an increasingly crowded field.