Nebius Group's stock (NBIS) saw an increase of approximately 3% in premarket trading on Monday, reaching a price of $222.00, as a resurgence of interest in AI infrastructure stocks prompted investor activity. The upbeat market sentiment followed positive movements in Nasdaq and S&P 500 futures, rising by 1.22% and 0.42% respectively.
Substantial Growth Over Recent Months
The stock's performance over the last six months has been remarkable, increasing by 124.1%, significantly outperforming the S&P 500's gain of 8.9%. Over the same period, the broader Zacks Computer & Technology sector noted a rise of 13.2%. In contrast, notable competitors like Microsoft experienced a drop of 18.9%, while CoreWeave saw a modest gain of 5.9%.
Currently, NBIS is trading 11.1% below its 20-day moving average, indicating that the recent price action may represent a rebound rather than a breakout.
Financial Performance in Q1 2026
The first quarter of 2026 proved to be exceptionally strong for Nebius, with revenues soaring 684% year-over-year to $399 million. The Nebius AI segment alone witnessed a staggering 841% growth, leading to an annualized run-rate of $1.9 billion. Overall, the adjusted EBITDA margin for the group was reported at 32%, with the Nebius AI segment achieving an even higher margin of 45%. Cash and equivalents ballooned to $9.3 billion, thanks to a convertible note offering of $4.3 billion and a $2 billion equity investment from NVIDIA.
Future Outlook and Capital Expenditure Changes
In light of recent performance, Nebius raised its capital expenditure guidance for 2026 to a range of $20 billion to $25 billion, up from a previous estimate of $16 billion to $20 billion, in an effort to bolster future growth capacities. The management indicated that this increase aims to satisfy anticipated customer demand. Capacity improvements have also been significant, with contracted power capacity rising from 2 gigawatts (GW) to over 3.5 GW, with plans to reach 4 GW by year-end.
Despite these positive indicators, margins are expected to decrease in Q2 as the effects of capital investments take hold before corresponding revenue materializes. Recovery to Q1 levels is anticipated by Q3, with further improvement expected by Q4. The company's valuation currently stands at a price/book ratio of 7.53, considerably higher than the industry average of 3.91.
Wall Street analysts maintain a positive outlook, with a general consensus rating of Buy. The average price target is set at $213.89, with Bank of America projecting a price target of $280. Upcoming earnings, expected on August 6, are forecasted to show a loss of 73 cents per share with revenues reaching $576.67 million.
