Nebius Group stock surged 216% year-to-date through December 2025, making it one of the top performers in AI infrastructure. The Amsterdam-based company, spun out from Russian tech giant Yandex, now trades around $87-$90 after pulling back from October highs.
Third-quarter revenue jumped 355% year-over-year to $146 million, driven by sold-out computing capacity. Full-year 2025 revenue is expected to reach $500-$550 million, though the company reported a $120 million net loss in Q3.
Major contracts with Microsoft and Meta Platforms fueled the growth, with multi-billion-dollar deals signed earlier this year. Nebius provides full-stack AI infrastructure using best-in-class GPUs at data centers it owns or leases.
Management raised 2026 computing power guidance from 1 gigawatt to over 2.5 gigawatts to meet demand. Annual recurring revenue projections sit at $900 million to $1.1 billion, significantly above current revenue figures.
Capital expenditure plans expanded from $2 billion to approximately $5 billion for GPU acquisition and infrastructure expansion. The increased spending supports growth but adds cost pressure as the company scales operations.
Analysts maintain a Strong Buy consensus with a $164.20 average price target, implying 87% upside from current levels. Five buy ratings were assigned in the last three months, according to Markets Insider data.
Valuation metrics show Nebius trading at nearly 60 times sales, a premium multiple reflecting its growth trajectory. The company's price-to-sales ratio remains elevated despite recent stock volatility.
Nebius management projects annual recurring revenue could reach $7 billion to $9 billion by the end of 2026. That represents a sevenfold increase from current ARR levels if achieved.
Market sentiment toward AI infrastructure stocks will determine 2026 performance, according to analysts. Current bearish sentiment contrasts with massive planned AI spending across the industry.
Competition from larger cloud providers with deeper resources presents ongoing challenges. Partnerships with major tech firms have supported growth but may face pressure as hyperscalers expand their own AI platforms.
The stock's 33% decline from October highs reflects broader tech sector weakness and valuation concerns. Volatility remains elevated after the 2025 surge, with daily moves of 3-4% not uncommon.
Profitability remains distant as Nebius prioritizes expansion over earnings. The company expects to remain unprofitable while scaling operations to meet computing demand.
Investors face a choice between growth potential and valuation risk heading into 2026. While doubling from current levels is possible with bullish sentiment, further declines could occur if market conditions deteriorate.
Nebius represents a pure-play AI infrastructure investment amid the artificial intelligence boom. Its performance in 2026 will test whether explosive revenue growth can translate into sustainable shareholder returns.
