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Can Nebius' Four-Pronged Strategy Create the Next AI Hyperscaler?
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Key Takeaways
NBIS targets at least 4 GW of contracted power in 2026 after expanding beyond 3.5 GW in the first quarter.
Nebius broadened its AI platform with Aether 3.6 and acquisitions of Tavily, Eigen AI and Clarifai.
NBIS raised 2026 capex to $20-$25B after securing more than $6B and ending with over $9B in cash.
Nebius Group N.V. (NBIS - Free Report) is building an AI-native hyperscaler by executing across four strategic dimensions. It is expanding its capacity and scale, enhancing its products and functionality, growing its customer base and demand, and strengthening its capital position.
On the capacity front, Nebius is rapidly expanding its AI infrastructure. After increasing contracted power from more than 2 GW at the end of 2025 to over 3.5 GW in the first quarter of 2026, the company now targets at least 4 GW this year. It also announced a new Pennsylvania site that will support up to 1.2 GW of power, marking its second company-owned GW-scale AI campus in the United States.
Nebius is expanding beyond AI compute to build a fully integrated AI platform. With more than 75% of its contracted power now coming from company-owned infrastructure, it is strengthening its full-stack offering across the AI lifecycle, including bare-metal, multi-tenant cloud, inference and agentic AI services. The launch of Aether 3.6, along with the acquisitions of Tavily, Eigen AI, and Clarifai, further enhances its platform, particularly its AI inference optimization capabilities. Demand is the third growth pillar, led by its full-stack AI platform, which serves a diverse customer base across industries. First-quarter pipeline generation reached a record, growing 3.5x sequentially, while demand continues to outpace available GPU capacity, with new deployments fully committed.
To meet this strong demand and existing customer commitments, Nebius raised its 2026 capex guidance to $20-$25 billion, accelerating capacity that is expected to begin generating revenue in the first half of 2027. Capital is the fourth pillar of Nebius' growth strategy. To fund its rapid expansion of AI infrastructure, it raised more than $6 billion this year, including over $4 billion through convertible notes and $2 billion from NVIDIA's equity investment. As a result, Nebius ended the period with a cash balance exceeding $9 billion, providing ample financial flexibility to support its long-term growth plans.
Inside the Playbooks of NBIS’ Cut-Throat Competitors
CoreWeave, Inc. (CRWV - Free Report) , like NBIS, highlighted four key themes– rising AI demand across hyperscalers and enterprises, a broader platform supporting training, inference, agentic AI workloads, rapid infrastructure expansion with more than 3.5 GW of contracted power and stronger financing that has secured more than $20 billion in debt and equity this year. AI workloads are shifting from training to inference and enterprise production, driving deeper commitments from existing customers while attracting new enterprise clients. This momentum fueled record backlog additions in the first quarter, with most of the new business expected to support its 2027 growth targets.
Microsoft (MSFT - Free Report) capitalizes on AI business momentum and Copilot adoption alongside Azure cloud infrastructure expansion. Its AI capabilities are translating into tangible commercial success, with Microsoft Copilot now deployed across more than 20 million paid Microsoft 365 Copilot seats and growing adoption across productivity, coding and security applications. MSFT’s business model spans multiple high-growth segments that collectively reduce concentration risk while providing numerous expansion vectors. Moreover, financial strength enables simultaneous investment in growth initiatives and substantial shareholder value return, with the company distributing $10.2 billion through dividends and share repurchases in the fiscal third quarter.
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Can Nebius' Four-Pronged Strategy Create the Next AI Hyperscaler?
Key Takeaways
Nebius Group N.V. (NBIS - Free Report) is building an AI-native hyperscaler by executing across four strategic dimensions. It is expanding its capacity and scale, enhancing its products and functionality, growing its customer base and demand, and strengthening its capital position.
On the capacity front, Nebius is rapidly expanding its AI infrastructure. After increasing contracted power from more than 2 GW at the end of 2025 to over 3.5 GW in the first quarter of 2026, the company now targets at least 4 GW this year. It also announced a new Pennsylvania site that will support up to 1.2 GW of power, marking its second company-owned GW-scale AI campus in the United States.
Nebius is expanding beyond AI compute to build a fully integrated AI platform. With more than 75% of its contracted power now coming from company-owned infrastructure, it is strengthening its full-stack offering across the AI lifecycle, including bare-metal, multi-tenant cloud, inference and agentic AI services. The launch of Aether 3.6, along with the acquisitions of Tavily, Eigen AI, and Clarifai, further enhances its platform, particularly its AI inference optimization capabilities. Demand is the third growth pillar, led by its full-stack AI platform, which serves a diverse customer base across industries. First-quarter pipeline generation reached a record, growing 3.5x sequentially, while demand continues to outpace available GPU capacity, with new deployments fully committed.
To meet this strong demand and existing customer commitments, Nebius raised its 2026 capex guidance to $20-$25 billion, accelerating capacity that is expected to begin generating revenue in the first half of 2027. Capital is the fourth pillar of Nebius' growth strategy. To fund its rapid expansion of AI infrastructure, it raised more than $6 billion this year, including over $4 billion through convertible notes and $2 billion from NVIDIA's equity investment. As a result, Nebius ended the period with a cash balance exceeding $9 billion, providing ample financial flexibility to support its long-term growth plans.
Inside the Playbooks of NBIS’ Cut-Throat Competitors
CoreWeave, Inc. (CRWV - Free Report) , like NBIS, highlighted four key themes– rising AI demand across hyperscalers and enterprises, a broader platform supporting training, inference, agentic AI workloads, rapid infrastructure expansion with more than 3.5 GW of contracted power and stronger financing that has secured more than $20 billion in debt and equity this year. AI workloads are shifting from training to inference and enterprise production, driving deeper commitments from existing customers while attracting new enterprise clients. This momentum fueled record backlog additions in the first quarter, with most of the new business expected to support its 2027 growth targets.
Microsoft (MSFT - Free Report) capitalizes on AI business momentum and Copilot adoption alongside Azure cloud infrastructure expansion. Its AI capabilities are translating into tangible commercial success, with Microsoft Copilot now deployed across more than 20 million paid Microsoft 365 Copilot seats and growing adoption across productivity, coding and security applications. MSFT’s business model spans multiple high-growth segments that collectively reduce concentration risk while providing numerous expansion vectors. Moreover, financial strength enables simultaneous investment in growth initiatives and substantial shareholder value return, with the company distributing $10.2 billion through dividends and share repurchases in the fiscal third quarter.
NBIS Price Performance, Valuation and Estimates
Shares of Nebius have gained 151.5% year to date compared with the Internet – Software and Services industry’s growth of 15.2%.
Image Source: Zacks Investment Research
In terms of price/book, NBIS’ shares are trading at 7.36X, higher than the Internet Software Services industry’s 3.97X.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for NBIS’ earnings for 2026 has been revised significantly upward over the past 60 days.
Image Source: Zacks Investment Research
NBIS currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.