Why Nebius Stock Jumped Today
Key Points
Demand for high-performance compute vastly exceeds supply.
Nebius is helping to close the gap.
- 10 stocks we like better than Nebius Group ›
Shares of Nebius Group (NASDAQ: NBIS) popped on Wednesday after the cloud computing infrastructure provider boosted its artificial intelligence (AI)-fueled growth forecast.
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Expanding at a breakneck pace
Nebius Group's revenue rocketed 684% higher year over year to $399 million in the first quarter.
"We continue to see unprecedented demand across the market," CEO Arkady Volozh said in a letter to shareholders. "Compute and cloud needs are vastly exceeding capacity as more industries embrace AI and companies move beyond experimentation to real-world applications."
To widen its competitive moat, the Amsterdam-based data center developer is expanding beyond infrastructure and into inference and agentic AI workloads. Nebius Group's acquisitions of agentic search leader Tavily in February and inference platform Eigen AI earlier this month are bolstering its technological capabilities.
Better still, Nebius Group's profitability is rapidly improving as it scales its computing network. The company's earnings before interest, taxes, depreciation, and amortization (EBITDA) improved to $129.5 million from a loss of $53.7 million in the prior-year quarter.
Ramping growth projections
Nebius Group's successful expansion to date prompted it to lift its contracted power target to more than 4 gigawatts by the end of 2026.
As part of those plans, the company announced that it secured up to 1.2 gigawatts of power for a new AI factory in Pennsylvania.
In turn, Nebius Group said it's on track to generate annual recurring revenue of $7 billion to $9 billion by the end of the year.
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Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
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