Nebius Surges 310% in a Year: Should You Buy, Hold or Sell?

NBIS has surged 310% in a year as AI expansion accelerates, but rising spending, financing needs and margin pressure raise questions about its next move.

Shivangi Deora

3 min read

Nebius Group N.V. NBIS is benefiting from strong AI growth drivers, expanding infrastructure and solid execution. Recently, NBIS strengthened its AI infrastructure strategy by securing its first senior secured debt facility of approximately $775 million, providing capital to accelerate global GPU deployment, expand compute capacity and support long-term growth with reduced reliance on equity financing.

The company also introduced an asset-light AI cloud model that enables infrastructure partners to deploy its platform in their own data centers, allowing the company to scale AI capacity faster, reduce capital intensity and strengthen its competitive position.

The stock has gained 309.7% in the past year, outperforming the Zacks Computer & Technology sector and the Zacks Internet Software Services industry’s growth of 34% and 20.8%, respectively. The S&P 500 composite is up 26.5% over the same time frame. The company’s shares have jumped 6% in a month.

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NBIS has outpaced its peers, NVIDIA Corporation NVDA, Microsoft Corporation MSFT and CoreWeave, Inc. CRWV, with NVDA up 18.3%, MSFT down 5.3% and CRWV decreasing 16.6% in the past three months.

After a strong rally, investors may be questioning whether NBIS has further upside potential or if its recent gains have already priced in the company's fundamentals. Let’s examine its key strengths and challenges to determine the appropriate investment outlook.

Factors to Consider

Nebius continues to rapidly expand its AI-native hyperscaler platform through investments in capacity, products, customers and capital. In the first quarter of 2026, it increased contracted power capacity from more than 2 GW to over 3.5 GW and now targets at least 4 GW by year-end. The company also announced a new 1.2 GW Pennsylvania site, while more than 75% of its contracted capacity is owned, reinforcing its vertically integrated AI infrastructure strategy.

The company is strengthening its AI cloud platform by expanding beyond compute into end-to-end cloud services spanning bare metal, multi-tenancy, inference and agentic AI. Acquisitions of Tavily, Eigen AI and Clarifai have enhanced its engineering talent and software capabilities, while an expanded partnership with NVIDIA and NVIDIA Exemplar Cloud status for GB300 training workloads further strengthens its competitive positioning.

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Customer demand remains robust, with multiple customers competing for every GPU deployed and first-quarter pipeline generation rising 3.5x sequentially. Strong adoption across AI-native firms, enterprises and industries such as fintech, life sciences, manufacturing and energy supported first-quarter revenue growth of 684% to $399 million. The company also maintained its 2026 outlook, backed by a stronger balance sheet with $9.3 billion in cash following a $4.3 billion convertible note offering, a $2 billion NVIDIA investment and record customer prepayments.

However, Nebius expects adjusted EBITDA margins to fluctuate during 2026 as it continues investing ahead of capacity deployment. Management indicated margins will likely decline in the second quarter, as infrastructure investments will be recognized before the associated revenue contribution, with recovery expected only in the second half of the year.

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The company has raised its 2026 capital expenditure guidance to $20-$25 billion from the previous $16-$20 billion range to support future capacity expansion. While aimed at meeting strong customer demand, the higher investment significantly increases capital requirements.

To fund its aggressive expansion, Nebius expects to rely on additional financing, including asset-backed structures, corporate debt, customer prepayments and other funding sources. This increases the company's dependence on external capital despite its disciplined approach to managing the balance sheet.

CoreWeave also raised its full-year capital expenditure guidance to $31-$35 billion, reflecting higher component costs and increased investments required to bring additional AI infrastructure capacity online.

A Look at NBIS' Valuation

In terms of price/book multiple, NBIS shares are trading at 7.89X, higher than the industry’s 4.14X. CRWV, MSFT and NVDA trade at a Price/Book of 8.64X, 8.27X and 26.24X, respectively.

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What to Do With NBIS Stock Now?

Nebius remains well-positioned to capitalize on the accelerating AI infrastructure opportunity. However, after its exceptional rally and elevated valuation, much of the near-term optimism appears priced in.

Coupled with heavy capital spending and potential margin pressure during 2026, investors may be better off waiting for a more attractive entry point before initiating or adding to positions.

Currently, NBIS stock carries a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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