Nebius is anticipated to expertise a sooner improve in income subsequent 12 months, pushed by its big backlog.
The corporate’s capability enlargement plans ought to help its income progress ramp-up in 2026.
Although the inventory is pricey, it’s nonetheless able to rising impressively within the coming 12 months because of the important gross sales improve it’s poised to ship.
Nebius Group(NASDAQ: NBIS) has made buyers considerably richer up to now 12 months. An funding of simply $100 in shares of this neocloud firm is now value simply over $266.
The 166% good points that Nebius achieved throughout this era have been fueled by the rising demand for synthetic intelligence (AI) computing energy in information facilities. It is within the enterprise of organising devoted AI information facilities outfitted with highly effective graphics processing items (GPUs) from Nvidia, in addition to server processors from AMD and Intel, to ship high-performance computing.
However can the corporate maintain its red-hot rally within the coming 12 months, particularly contemplating considerations concerning the heavy spending on AI infrastructure? Let’s discover out.
Picture supply: Getty Pictures.
Nebius rents out its computing energy to prospects that require it to run AI workloads, retailer AI-related information within the cloud, prepare massive language fashions (LLMs), develop customized AI options, and execute AI inference options. Extra importantly, the corporate goes past simply offering the {hardware}. It’s a full-stack AI firm providing managed software program companies that allow prospects to construct and fine-tune fashions and inference functions.
As such, it is able to capitalize on two key points of the AI market.
First, hyperscalers and AI firms are in search of to amass computing energy to run AI workloads within the cloud. There’s a deficit in accessible AI computing energy, which is why main cloud computing firms aren’t capable of fulfill their contracts. In consequence, the contractual backlogs of those firms have skyrocketed.
Second, an rising variety of companies, governments, and AI firms are prone to develop and deploy AI functions, each for his or her in-house use and for purchasers. That is as a result of the know-how is driving productiveness good points for firms adopting it. Market analysis agency IDC estimates that every $1 spent on AI in 2030 might generate $4.60 in worth.
This could pave the way in which for Nebius to continue to grow at a blistering tempo within the coming 12 months, given the full-stack nature of its companies. Its income within the first 9 months of 2025 shot up by 437% to $302 million. Furthermore, Nebius additionally lowered its adjusted web loss by 61% throughout this era to $170 million.
Administration expects to realize annualized run-rate income of $7 billion to $9 billion by the tip of 2026. It calculates this metric by multiplying the income within the remaining month of the quarter by 12. This implies gross sales in December 2026 could possibly be as excessive as $750 million. That is considerably greater than what the corporate has generated to this point in 2025.
For comparability, Nebius is anticipated to shut 2025 with $556 million in income, up by 374% from final 12 months. Analysts anticipate an acceleration in its top-line progress to $3.3 billion in 2026.
Nebius’ income, subsequently, might bounce sixfold subsequent 12 months. This bold goal appears achievable as a result of the corporate has landed a few big contracts from Meta Platforms and Microsoft which are prone to supercharge its progress in 2026. These two firms alone have created a income backlog of greater than $20 billion for the corporate.
In consequence, Nebius now plans to extend its related information heart capability to a spread of 800 megawatts (MW) to 1 gigawatt by the tip of 2026. That might be a serious improve over the 220 MW of related energy that it is projecting by the tip of 2025. This main capability enlargement ought to help the unbelievable income progress that analysts expect from the corporate subsequent 12 months.
However will this blistering progress be sufficient to ship the inventory greater?
The inventory’s gorgeous rally up to now 12 months is the explanation it is now buying and selling at a expensive 65 occasions gross sales. That is approach greater than the U.S. know-how sector’s common price-to-sales ratio (P/S) of 9.
However then, Nebius’ red-hot progress, which is ready to get higher subsequent 12 months, justifies its valuation. In reality, the corporate’s ahead gross sales multiples are considerably decrease because of the big progress that it’s anticipated to ship.
Even when Nebius trades at a considerably discounted 10 occasions gross sales (nearly consistent with the tech sector’s common) subsequent 12 months and delivers $3.3 billion in income, its market cap might hit $33 billion. That factors towards potential good points of 33% from present ranges. Nonetheless, this AI inventory might ship greater than that since it’s prone to take pleasure in a premium valuation resulting from its big backlog, which might assist it beat Wall Road’s income expectations for 2026.
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Harsh Chauhan has no place in any of the shares talked about. The Motley Idiot has positions in and recommends Superior Micro Units, Intel, Meta Platforms, Microsoft, and Nvidia. The Motley Idiot recommends the next choices: lengthy January 2026 $395 calls on Microsoft and quick January 2026 $405 calls on Microsoft. The Motley Idiot has a disclosure coverage.
