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Nebius vs. IREN: Which AI Infrastructure Stock is the Better Buy?
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Key Takeaways
NBIS and IREN are capitalizing on AI infrastructure demand through aggressive data center and GPU expansion.
Nebius posted 454% revenue growth in Q2, while IREN secured about $4 billion in contracted annual revenues.
Nebius gained 46.9% in a year versus IREN's 50.4% decline, but trades at a higher Price/Book valuation.
Nebius Group N.V. (NBIS - Free Report) and IREN Limited (IREN - Free Report) are capitalizing on the rapidly growing demand for AI computing infrastructure. The increasing adoption of generative AI, agentic AI and inference applications is driving substantial demand for high-performance GPUs, data centers and scalable cloud platforms. However, the availability of power, land and data center capacity remains a major constraint, as physical infrastructure takes years to develop while AI workloads continue to expand rapidly. Growing demand from hyperscalers, AI developers and enterprises, coupled with limited near-term computing capacity, is creating significant growth opportunities for AI infrastructure providers and supporting favorable pricing trends.
Nebius is focused on building a full-stack AI cloud platform, combining GPU infrastructure, software and services to support AI-native companies, enterprises and other customers. The company is expanding its computing capacity while pursuing flexible contracting models and asset-light partnerships to capitalize on increasing demand.
Meanwhile, IREN operates a vertically integrated AI infrastructure platform spanning power, land, data centers, GPU computing and managed services. The company is accelerating its transition from Bitcoin mining to AI cloud services, supported by multiyear customer contracts and an expanding data center portfolio.
With both companies investing heavily in capacity expansion to address growing AI computing demand, which stock offers a more compelling investment opportunity: NBIS or IREN?
Let’s evaluate their fundamentals, growth prospects, market challenges and valuations to determine which one presents a stronger investment opportunity.
The Case for NBIS
Nebius is gaining from robust demand for AI infrastructure and its rapidly expanding cloud business. In the second quarter of 2026, revenues surged 454% year over year to $582 million, while Nebius AI revenues jumped 514% to $575 million. Annualized run-rate revenues reached $3 billion at June-end, increasing 598% year over year. Higher infrastructure utilization, additional capacity and contributions from new businesses supported growth. The company reaffirmed its 2026 revenue guidance of $3-$3.4 billion and annualized run-rate revenue target of $7-$9 billion.
The company is benefiting from strong customer demand and favorable contract economics. During the second quarter, Nebius secured four major AI cloud agreements, each averaging more than $1 billion, with customers including Reflection and Cohere. These contracts offer annual revenue potential of $20-$25 million per megawatt, with upfront payments covering 50-60% of associated capital expenditures. Management believes it could sell its entire planned 2027 capacity at prevailing terms, underscoring strong demand visibility. Its contracted backlog of approximately $40 billion further strengthens long-term growth prospects.
Nebius' aggressive infrastructure expansion is another major growth catalyst. The company raised its year-end 2026 contracted power target to 5 gigawatts and expects to deploy more than 1 gigawatt of new capacity annually beginning in 2027. Its partnership with Bloom Energy and combination of grid and on-site power solutions should support capacity expansion. The company also expects to introduce NVIDIA's Vera Rubin GPUs beginning in late 2026 or early 2027, positioning it to address growing demand for next-generation AI computing.
The company is also gaining from its flexible monetization strategies and expanding software portfolio. Its first capacity auction achieved pricing 15% above the previous peak for Blackwell-generation chips, while shorter-duration contracts are being negotiated at $40-$50 million per megawatt. The asset-light partnership model should create additional high-margin revenue opportunities without substantial capital commitments. Meanwhile, Token Factory and the integration of acquired businesses are strengthening its capabilities across AI training, inference and agentic applications.
Improving profitability and financial flexibility further support Nebius' prospects. Second-quarter adjusted EBITDA was $236 million against a loss of $21 million a year earlier, while adjusted EBITDA margin expanded to 41%. Customer prepayments are expected to exceed $9 billion in 2026, reducing external financing requirements. The company also ended June with approximately $8 billion in cash.
Nebius Group N.V. Price, Consensus and EPS Surprise
However, Nebius is grappling with substantial capital requirements associated with its aggressive infrastructure expansion. Second-quarter capital expenditures totaled approximately $5.7 billion, while management expects full-year spending of $20-$25 billion. Such elevated investments could strain financial flexibility and increase dependence on external funding. The issuance of 12.7 million shares during the second quarter highlights potential shareholder dilution.
The company also faces execution risks associated with capacity deployment and revenue realization. Delays in data center commissioning, GPU installation, customer onboarding and regulatory approvals could affect growth. Moreover, much of its newly contracted capacity will begin generating revenues only in late 2026 and 2027, limiting near-term contributions. The company's continued investments in early-stage businesses, including Avride and TripleTen, also weigh on consolidated profitability.
The Case for IREN
IREN is gaining from robust demand for AI infrastructure and the rapid expansion of its AI cloud business. The company has secured approximately $4 billion in contracted annual recurring revenues (ARR) from its 2026 capacity, of which $1 billion was operational as of August 2026. Its expanding customer base includes Cohere, Perplexity, Figure AI, Prometheus and other leading AI developers. Renewals and expansions from existing customers, including Together AI and Fireworks AI, further highlight sustained demand for its computing infrastructure. Management expects ARR to exceed $4 billion by the December 2026 quarter-end, with the associated revenue contribution becoming more visible in the March 2027 quarter.
The company is benefiting from favorable pricing trends amid constrained AI computing capacity. Since November, pricing for three-year contracts has increased approximately 125%, while five-year contract pricing has risen nearly 70%. Recent three-year agreements have exceeded $20 million per megawatt of IT load, with ongoing negotiations approaching $25 million. These favorable pricing dynamics, coupled with customer prepayments covering 45-55% of GPU capital expenditures, support attractive investment returns and strengthen the company's growth prospects.
IREN's expanding data center footprint further strengthens its competitive position. The company delivered Horizon 1 to Microsoft in August 2026, while Horizon 2 through 4 were targeted for completion in the December quarter. It plans to deliver approximately 500 megawatts of additional IT load in 2027, supported by developments across Texas, British Columbia and other locations. Its portfolio of more than 5 gigawatts of secured grid connections provides substantial expansion opportunities beyond existing deployments.
IREN is also benefiting from its vertically integrated business model and improving financing capabilities. The addition of Mirantis strengthens its software and managed services offerings, enabling it to serve a broader customer base. Meanwhile, approximately $19 billion secured through financing, customer prepayments, convertible notes and equity over the preceding 12 months provides substantial financial flexibility to support its ambitious AI infrastructure expansion.
However, IREN is grappling with substantial capital expenditure requirements associated with its aggressive infrastructure expansion. Management expects fiscal 2027 capital expenditures of $25-$30 billion, reflecting significant investments in GPUs, data centers and supporting infrastructure. Although the company has secured considerable funding, it anticipates requiring an additional $8 billion through GPU financing and customer prepayments, alongside other funding sources. Consequently, continued dependence on external financing exposes IREN to changes in capital market conditions and borrowing costs.
The company is also facing profitability pressures amid its transition from Bitcoin mining to AI cloud operations. Fourth-quarter fiscal 2026 revenues declined sequentially by $7.6 million to $137.2 million, primarily due to mining hardware decommissioning. IREN reported a quarterly net loss of $684 million, including substantial noncash impairment charges and declines in the value of mining equipment held for sale. Moreover, management expects cash selling, general and administrative expenses to increase sequentially by $40-$50 million in the September quarter as investments in personnel and operations accelerate.
IREN's ambitious growth targets also expose it to execution risks. The company's expansion depends on timely GPU deliveries, data center construction, commissioning and customer onboarding. Rising computing equipment costs, construction-related inflation and long infrastructure development lead times could further complicate deployment schedules. Any delays in bringing contracted capacity online could defer revenue recognition, pressure investment returns and weaken near-term financial performance.
Share Performance for NBIS & IREN
In the past year, NBIS stock has gained 46.9% while IREN declined 50.4%.
Image Source: Zacks Investment Research
Valuation for NBIS & IREN
In terms of Price/Book, NBIS shares are trading at 4.46X, higher than IREN’s 2.72X.
Image Source: Zacks Investment Research
How Do Estimates Compare for NBIS & IREN?
Over the past 60 days, analysts have revised their estimates upward for NBIS’ bottom line for the current year.
Image Source: Zacks Investment Research
For IREN, estimates have been revised downward over the past 60 days.
Image Source: Zacks Investment Research
NBIS or IREN: Which Stock is the Better Investment?
NBIS appears better positioned to capitalize on the AI infrastructure boom, supported by robust revenue growth, a substantial contracted backlog and improving profitability. Moreover, its favorable earnings estimate revisions and Zacks Rank #2 (Buy) compared with IREN’s Zacks Rank #3 (Hold), reinforce its relative investment appeal despite its premium valuation.
View the Zacks #1 Rank List
Image: Bigstock
Nebius vs. IREN: Which AI Infrastructure Stock is the Better Buy?
Key Takeaways
Nebius Group N.V. (NBIS - Free Report) and IREN Limited (IREN - Free Report) are capitalizing on the rapidly growing demand for AI computing infrastructure. The increasing adoption of generative AI, agentic AI and inference applications is driving substantial demand for high-performance GPUs, data centers and scalable cloud platforms. However, the availability of power, land and data center capacity remains a major constraint, as physical infrastructure takes years to develop while AI workloads continue to expand rapidly. Growing demand from hyperscalers, AI developers and enterprises, coupled with limited near-term computing capacity, is creating significant growth opportunities for AI infrastructure providers and supporting favorable pricing trends.
Nebius is focused on building a full-stack AI cloud platform, combining GPU infrastructure, software and services to support AI-native companies, enterprises and other customers. The company is expanding its computing capacity while pursuing flexible contracting models and asset-light partnerships to capitalize on increasing demand.
Meanwhile, IREN operates a vertically integrated AI infrastructure platform spanning power, land, data centers, GPU computing and managed services. The company is accelerating its transition from Bitcoin mining to AI cloud services, supported by multiyear customer contracts and an expanding data center portfolio.
With both companies investing heavily in capacity expansion to address growing AI computing demand, which stock offers a more compelling investment opportunity: NBIS or IREN?
Let’s evaluate their fundamentals, growth prospects, market challenges and valuations to determine which one presents a stronger investment opportunity.
The Case for NBIS
Nebius is gaining from robust demand for AI infrastructure and its rapidly expanding cloud business. In the second quarter of 2026, revenues surged 454% year over year to $582 million, while Nebius AI revenues jumped 514% to $575 million. Annualized run-rate revenues reached $3 billion at June-end, increasing 598% year over year. Higher infrastructure utilization, additional capacity and contributions from new businesses supported growth. The company reaffirmed its 2026 revenue guidance of $3-$3.4 billion and annualized run-rate revenue target of $7-$9 billion.
The company is benefiting from strong customer demand and favorable contract economics. During the second quarter, Nebius secured four major AI cloud agreements, each averaging more than $1 billion, with customers including Reflection and Cohere. These contracts offer annual revenue potential of $20-$25 million per megawatt, with upfront payments covering 50-60% of associated capital expenditures. Management believes it could sell its entire planned 2027 capacity at prevailing terms, underscoring strong demand visibility. Its contracted backlog of approximately $40 billion further strengthens long-term growth prospects.
Nebius' aggressive infrastructure expansion is another major growth catalyst. The company raised its year-end 2026 contracted power target to 5 gigawatts and expects to deploy more than 1 gigawatt of new capacity annually beginning in 2027. Its partnership with Bloom Energy and combination of grid and on-site power solutions should support capacity expansion. The company also expects to introduce NVIDIA's Vera Rubin GPUs beginning in late 2026 or early 2027, positioning it to address growing demand for next-generation AI computing.
The company is also gaining from its flexible monetization strategies and expanding software portfolio. Its first capacity auction achieved pricing 15% above the previous peak for Blackwell-generation chips, while shorter-duration contracts are being negotiated at $40-$50 million per megawatt. The asset-light partnership model should create additional high-margin revenue opportunities without substantial capital commitments. Meanwhile, Token Factory and the integration of acquired businesses are strengthening its capabilities across AI training, inference and agentic applications.
Improving profitability and financial flexibility further support Nebius' prospects. Second-quarter adjusted EBITDA was $236 million against a loss of $21 million a year earlier, while adjusted EBITDA margin expanded to 41%. Customer prepayments are expected to exceed $9 billion in 2026, reducing external financing requirements. The company also ended June with approximately $8 billion in cash.
Nebius Group N.V. Price, Consensus and EPS Surprise
Nebius Group N.V. price-consensus-eps-surprise-chart | Nebius Group N.V. Quote
However, Nebius is grappling with substantial capital requirements associated with its aggressive infrastructure expansion. Second-quarter capital expenditures totaled approximately $5.7 billion, while management expects full-year spending of $20-$25 billion. Such elevated investments could strain financial flexibility and increase dependence on external funding. The issuance of 12.7 million shares during the second quarter highlights potential shareholder dilution.
The company also faces execution risks associated with capacity deployment and revenue realization. Delays in data center commissioning, GPU installation, customer onboarding and regulatory approvals could affect growth. Moreover, much of its newly contracted capacity will begin generating revenues only in late 2026 and 2027, limiting near-term contributions. The company's continued investments in early-stage businesses, including Avride and TripleTen, also weigh on consolidated profitability.
The Case for IREN
IREN is gaining from robust demand for AI infrastructure and the rapid expansion of its AI cloud business. The company has secured approximately $4 billion in contracted annual recurring revenues (ARR) from its 2026 capacity, of which $1 billion was operational as of August 2026. Its expanding customer base includes Cohere, Perplexity, Figure AI, Prometheus and other leading AI developers. Renewals and expansions from existing customers, including Together AI and Fireworks AI, further highlight sustained demand for its computing infrastructure. Management expects ARR to exceed $4 billion by the December 2026 quarter-end, with the associated revenue contribution becoming more visible in the March 2027 quarter.
The company is benefiting from favorable pricing trends amid constrained AI computing capacity. Since November, pricing for three-year contracts has increased approximately 125%, while five-year contract pricing has risen nearly 70%. Recent three-year agreements have exceeded $20 million per megawatt of IT load, with ongoing negotiations approaching $25 million. These favorable pricing dynamics, coupled with customer prepayments covering 45-55% of GPU capital expenditures, support attractive investment returns and strengthen the company's growth prospects.
IREN's expanding data center footprint further strengthens its competitive position. The company delivered Horizon 1 to Microsoft in August 2026, while Horizon 2 through 4 were targeted for completion in the December quarter. It plans to deliver approximately 500 megawatts of additional IT load in 2027, supported by developments across Texas, British Columbia and other locations. Its portfolio of more than 5 gigawatts of secured grid connections provides substantial expansion opportunities beyond existing deployments.
IREN is also benefiting from its vertically integrated business model and improving financing capabilities. The addition of Mirantis strengthens its software and managed services offerings, enabling it to serve a broader customer base. Meanwhile, approximately $19 billion secured through financing, customer prepayments, convertible notes and equity over the preceding 12 months provides substantial financial flexibility to support its ambitious AI infrastructure expansion.
IREN Limited Price, Consensus and EPS Surprise
IREN Limited price-consensus-eps-surprise-chart | IREN Limited Quote
However, IREN is grappling with substantial capital expenditure requirements associated with its aggressive infrastructure expansion. Management expects fiscal 2027 capital expenditures of $25-$30 billion, reflecting significant investments in GPUs, data centers and supporting infrastructure. Although the company has secured considerable funding, it anticipates requiring an additional $8 billion through GPU financing and customer prepayments, alongside other funding sources. Consequently, continued dependence on external financing exposes IREN to changes in capital market conditions and borrowing costs.
The company is also facing profitability pressures amid its transition from Bitcoin mining to AI cloud operations. Fourth-quarter fiscal 2026 revenues declined sequentially by $7.6 million to $137.2 million, primarily due to mining hardware decommissioning. IREN reported a quarterly net loss of $684 million, including substantial noncash impairment charges and declines in the value of mining equipment held for sale. Moreover, management expects cash selling, general and administrative expenses to increase sequentially by $40-$50 million in the September quarter as investments in personnel and operations accelerate.
IREN's ambitious growth targets also expose it to execution risks. The company's expansion depends on timely GPU deliveries, data center construction, commissioning and customer onboarding. Rising computing equipment costs, construction-related inflation and long infrastructure development lead times could further complicate deployment schedules. Any delays in bringing contracted capacity online could defer revenue recognition, pressure investment returns and weaken near-term financial performance.
Share Performance for NBIS & IREN
In the past year, NBIS stock has gained 46.9% while IREN declined 50.4%.
Image Source: Zacks Investment Research
Valuation for NBIS & IREN
In terms of Price/Book, NBIS shares are trading at 4.46X, higher than IREN’s 2.72X.
Image Source: Zacks Investment Research
How Do Estimates Compare for NBIS & IREN?
Over the past 60 days, analysts have revised their estimates upward for NBIS’ bottom line for the current year.
Image Source: Zacks Investment Research
For IREN, estimates have been revised downward over the past 60 days.
Image Source: Zacks Investment Research
NBIS or IREN: Which Stock is the Better Investment?
NBIS appears better positioned to capitalize on the AI infrastructure boom, supported by robust revenue growth, a substantial contracted backlog and improving profitability. Moreover, its favorable earnings estimate revisions and Zacks Rank #2 (Buy) compared with IREN’s Zacks Rank #3 (Hold), reinforce its relative investment appeal despite its premium valuation.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.