Nebius Group $NBIS Q2 2025 revenue surges 625%, targets 1GW data centre capacity by 2026

In the rapidly evolving landscape of AI infrastructure, Nebius Group’s aggressive push to scale data centre capacity stands out as a potential catalyst for explosive revenue growth, positioning the company as a compelling opportunity amid surging demand for computational power. With targets set to reach 1 gigawatt (GW) by the end of 2026, even conservative scenarios suggest revenues could multiply several times over current levels, implying that the stock’s valuation may not yet reflect this transformative trajectory.

Recent Earnings Momentum Signals Strong Execution

Nebius Group’s latest quarterly results underscore a remarkable acceleration in its core AI infrastructure business. For the second quarter of 2025, revenues surged 625% year-over-year to $105.1 million, driven by robust demand for GPU clusters and cloud services tailored to AI workloads. This performance exceeded analyst expectations, which had pegged revenues at around $101.2 million, according to data from financial platforms.

Crucially, the company achieved positive adjusted EBITDA in its core operations ahead of schedule, a milestone originally slated for late 2025. This early profitability highlights operational efficiency and pricing power in a market where supply constraints are pushing utilisation rates near capacity. Group-wide adjusted EBITDA losses narrowed to $21 million, far better than the estimated $59.6 million shortfall, reflecting disciplined cost management amid heavy investments.

Building on this momentum, Nebius raised its annualised run-rate revenue (ARR) guidance for 2025 to between $900 million and $1.1 billion, up from prior projections. This revision aligns with broader industry trends, where AI-driven demand is forecast to triple data centre capacity needs over the next five years.

Capacity Expansion: The Engine of Future Growth

At the heart of Nebius’s strategy is a bold infrastructure ramp-up, with current capacity exceeding 100 megawatts (MW) across its European and emerging US footprints. The company has outlined plans to secure over 1 GW of power by 2026, a tenfold increase that could redefine its scale in the AI cloud arena. This expansion includes tripling capacity at its Finland data centre to 75 MW by early 2026 and launching new facilities, such as a major site in New Jersey aimed at tapping North American demand.

To contextualise the revenue potential, consider that Nebius’s existing operations demonstrate strong monetisation per unit of capacity. With around 100 MW currently online, the company is on track for substantial ARR growth. Analyst models, drawing from company disclosures, suggest that every 100 MW of active capacity could generate approximately $1 billion in annual revenue at prevailing pricing for AI-optimised services, assuming high occupancy rates driven by chronic shortages in GPU availability.

Projecting forward, if Nebius activates just 50% of its 1 GW target by the end of 2026—equating to 500 MW—and achieves 70% occupancy, revenues could approach $3.5 billion annually. A more optimistic scenario with 600 MW online at similar utilisation might yield $4.2 billion. These figures are grounded in the company’s own guidance and cross-referenced with industry benchmarks; for instance, comparable AI infrastructure providers report revenue densities in this range when factoring in premium pricing for specialised hardware like NVIDIA H200 GPUs.

• Finland Expansion: Tripling to 75 MW, projected to contribute up to $1 billion in ARR alone, per company estimates.
• US Push: New 300 MW data centre in New Jersey, set to scale rapidly and capture transatlantic demand.
• Power Commitments: Securing 1 GW by 2026, backed by $2 billion in planned capital expenditures for 2025.

These projections are not without precedent. Analyses from sites such as AInvest highlight Nebius’s vertical integration—designing proprietary servers and forging NVIDIA partnerships—as key differentiators that could sustain margins above 25% EBIT in a mature phase.

Valuation Implications in a High-Growth Sector

As of 11 August 2025, Nebius trades at $68.78 per share on Nasdaq, reflecting a market capitalisation of approximately $16.4 billion. This places it at a forward price-to-sales multiple of around 15–18 times the upper end of its 2025 ARR guidance, which might seem elevated at first glance. However, when viewed through the lens of 2026 potential, the picture shifts dramatically.

Applying a conservative 5x sales multiple to a $4.2 billion revenue scenario yields a valuation north of $21 billion—a 28% premium to current levels. More aggressive models, incorporating 25% EBIT margins and a 30x earnings multiple (aligned with high-growth AI peers), suggest upside to $50 billion or more if net income approaches $1.6 billion. Live ticker data shows the stock up 5.31% in the latest session, closing at $68.78 from a previous $65.31, with trading volume spiking to 18.5 million shares amid positive sentiment.

Analyst sentiment remains bullish, with ratings averaging a ‘Strong Buy’ (1.2 on a 1–5 scale) from multiple sources. Posts on platforms such as X reflect growing investor enthusiasm, often citing capacity targets as a path to $10 billion-plus revenues, though such views should be treated as speculative and not definitive forecasts.

Risks and Broader Market Context

Of course, this growth narrative carries risks. Supply chain bottlenecks for GPUs, escalating energy costs, and competition from hyperscalers like Amazon Web Services (which recently acknowledged capacity shortfalls) could temper execution. Nebius’s $2 billion capex plan for 2025 will strain cash flows, with full-year EBITDA expected to turn positive only in the second half. Historical data from 2024 shows revenues of $117.5 million with significant losses, underscoring the capital-intensive nature of the buildout.

Yet, in a market where AI infrastructure demand outstrips supply—evidenced by McKinsey’s tripling forecast—these hurdles may prove surmountable. Nebius’s focus on Europe and selective US expansion provides geographic diversification, potentially insulating it from regional regulatory pressures.

Investor Takeaway: A Bet on AI’s Infrastructure Boom

Nebius Group’s trajectory illustrates the outsized rewards possible in AI’s foundational layer, where capacity is king. With clear milestones toward 1 GW and revenue projections that could redefine its scale, the company appears poised for substantial value creation. Investors eyeing the sector might find the current valuation an attractive entry point, provided execution matches ambition. As the AI arms race intensifies, those who scale fastest stand to win biggest—Nebius could well be among them.

References

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