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When Nvidia (NVDA) invests in a company, investors pay attention. The chip giant doesn’t hand out multi-billion-dollar investments lightly. According to Nvidia’s recent filing, the company now owns 22.2 million Nebius (NBIS) shares, representing a 9.3% stake in the AI cloud company. Nvidia’s trust in Nebius didn't just appear overnight. The chip giant first became an investor in late 2024 through Nebius' $700 million private placement and has steadily increased its stake since then. Nebius stock has climbed an impressive 147.6% year-to-date (YTD), surpassing the overall market.
But Nvidia’s backing isn’t just about capital. It signals that Nvidia sees Nebius as an important partner in the AI infrastructure ecosystem. The business is growing at a staggering pace. However, the challenge is that much of that expectation appears to be already priced into the stock. Nebius is set to report its Q2 earnings on August 12. Is Nebius stock a buy now?
Nebius Is Scaling Faster Than Expected
Nebius is no longer a small AI infrastructure startup waiting for customer demand to show up. Instead, the company is now focused on building capacity quickly enough to satisfy customers that are already waiting. The company rents Nvidia-powered computing capacity and provides software platforms that help businesses train, deploy, and run large AI models.
In the first quarter, group revenue surged 684% year-over-year (YOY) to $399 million, while Nebius' core AI cloud business rose 841% to $390 million. Nebius ended the quarter with an annualized revenue run rate (ARR) of $1.9 billion, up 50% in just one quarter. This highlights how rapidly new AI infrastructure is being deployed and monetized. Despite this tremendous revenue growth, the company is still not profitable. It reported an adjusted net loss of $100.3 billion in Q1. But this high demand is the reason Nebius is choosing to aggressively expand its infrastructure footprint instead of slowing investment to improve short-term profits.
During the Q1 earnings call, CEO Arkady Volozh clarified that Nebius wants to own every important layer of AI infrastructure and not just lease Nvidia hardware. And the company is already heading in the right direction. Nebius has expanded its contracted power capacity to more than 3.5 gigawatts and is targeting at least 4 gigawatts before year-end.
Notably, over 75% of Nebius' contracted capacity is now owned infrastructure, giving the company more control over costs and deployment. The company also has a diversified customer base spanning across fintech, robotics, life sciences, manufacturing, pharmaceuticals, and energy. Its customers include Revolut, robotics company 1X Technologies, and life sciences companies, among others.
Meta Platforms (META) alone has inked a $27 billion contract, and it has negotiated other financing deals with Microsoft (MSFT). This financial flexibility has enabled Nebius to plan capital expenditures of $20 billion to $25 billion in 2026. Furthermore, by acquiring Eigen AI, Clarifai and Tavily, Nebius has also expanded its software platforms.
Growth Is Incredible, But So Is the Price Tag
Nebius is building one of the fastest-growing AI cloud platforms in the industry. Analysts even expect Q2 earnings to increase to $582.9 million from $55.3 million in the year ago quarter. While revenue growth is extraordinary, the company is still not profitable, with analysts expecting a loss of $0.60 per share in Q2. Furthermore, analysts also forecast the company to report a loss for the full year.
However, Nebius is expected to generate $3.4 billion of revenue in 2026, a staggering YOY increase of 539%, followed by an increase of 238% to $11.46 billion in 2027. The stock is trading at 17.07 times forward sales, leaving very little room for error. Moreover, management has acknowledged that quarterly results will likely remain uneven because revenue depends heavily on when new data center capacity becomes operational. That makes Nebius a high-risk, high-reward AI play. Investors who find the stock overpriced now might want to watch its upcoming Q2 report to determine if Nebius is consistently delivering the remarkable growth it has promised.
On Wall Street, Nebius stock has earned a consensus “Moderate Buy” rating. Out of the 17 analysts covering the stock, 10 have a “Strong Buy” recommendation and seven rate it a “Hold.” Wall Street sees a potential upside of 11.95% from current levels based on its average target price of $252.71. Plus, the high price estimate of $410 implies an upside potential of 81.6% over the next 12 months.
