Nebius (NBIS) pairs a more than $40 billion backlog with vertically integrated AI infrastructure, but its upside depends on executing a $20-$25 billion buildout.
Overview
Nebius Group N.V. is an Amsterdam-headquartered, vertically integrated AI-cloud infrastructure provider formed in July 2024 after the separation of Yandex’s Russian operations. It retained more than 1,000 engineers and emerged with $2.5 billion of clean cash and zero debt, although subsequent convertible issuance has materially changed the balance sheet. The company rents accelerated GPU compute, storage, networking, and orchestration software to AI startups, enterprises, Meta, and Microsoft. **The investment case rests on converting a more than $40 billion Meta/Microsoft backlog and a 5.0 GW contracted-power pipeline into recurring revenue.** Nebius owns or co-designs more than 75% of contracted capacity and reports a 1.25 PUE, creating potential cost advantages versus leased neocloud capacity. Q2 2026 revenue rose 454% year over year to $582.3 million, while core AI Cloud revenue increased 514% to $574.9 million and segment Adjusted EBITDA margin reached 49.7%. Valuation is demanding at 18.1x projected 2026E EV/Sales but falls to 6.1x on 2027E revenue if buildout converts as planned. Near-term catalysts are Vineland power delivery by late 2026, $7-$9 billion year-end ARR, Blackwell deployment, and 2027 capacity ramps.