Nebius Group N.V. (NBIS) shares rose about 2% in premarket trading on Wednesday after William Blair initiated coverage of the AI-focused cloud provider with an Outperform rating. Analyst Jason Ader said Nebius has the attributes to become a differentiated AI-native cloud platform, citing infrastructure scale, software capabilities, major customer relationships and access to low-cost capital. Ader described Nebius as not just another neocloud and said its current valuation does not fully reflect long-term earnings potential.
The William Blair call follows a bullish move from BNP Paribas on September 24, when the firm upgraded Nebius to Outperform from Neutral and raised its price target to $399 from $260. BNP Paribas said Nebius’ outlook had meaningfully improved since it began covering the company in June. The bank projected Nebius could approach $22 billion in annual recurring revenue by the end of 2027 and said eventual 2027 guidance could reset market estimates higher.
Nebius reported second-quarter revenue of $582.3 million, up 454% from a year earlier. Adjusted EBITDA swung from a loss of $21 million to earnings of $236.2 million, while adjusted net loss narrowed 64% to $33.2 million. The company called the quarter its best commercial period yet, with four major AI cloud deals carrying an average total contract value above $1 billion each. Its five-year agreement with Meta Platforms has a potential value of up to $27 billion, and Nebius said it had more than $40 billion in additional contracted revenue from investment-grade customers including Microsoft and Meta.
Nebius also announced a $10 billion expansion to build an AI factory in Finland and has begun validating its first full Nvidia Vera Rubin NVL72 rack at its Finland data centre. The company closed a $5.75 billion convertible-note offering in August and will raise prices on select Nvidia GPU models starting October 1. Earlier this month, Palantir named Nebius its preferred sovereign AI infrastructure partner. According to WSJ data, analysts have a consensus overweight rating on Nebius stock, with 14 buy ratings, one overweight rating, seven hold ratings, one underweight rating and one sell rating. Michael Burry has converted short positions into put options calling it part of a broader AI bubble hedge, though the stock remains above its 52-week low of $73.52 and below its 52-week high of $299.86.
