In the year 2025, Nebius Group experienced the type of year that is usually a fantasy for all the companies. As per the data by S&P Global Market Intelligence, the stock went up more than 200% (202.2%) in a matter of months. This effectively tripled its revenue in a very short time, as the firm focused on growing and relying heavily on its main business area, which is its artificial intelligence cloud infrastructure.
Also, Nebius announced two major deals with hyperscalers that ultimately rapidly packed the company’s available data center capacity. In the market, who are always looking for AI vendors and suppliers, suddenly saw Nebius as the one that everyone should have.
Positioned Right on the AI Spot
At the beginning of 2025, Nebius set daring growth objectives for itself and did not get scared. In spite of the fact that the revenue for the second quarter was only $105 million, the management not only raised guidance, but also claimed that the investors should get ready for an annual revenue run rate of up to $1.1 billion by the end of the year.
That’s not just any gradual growth, instead that’s the financial equivalent of speeding up and tripling its revenue. However, the optimism was not without a justification. Nebius is a front-runner in high-performance cloud infrastructure whose primary aim is AI workloads, and that is the area where the demand is greater than the supply.
Nebius signed the contract with Microsoft in September for up to $19.4 billion, which was more than the firm’s entire market cap at that time. This is a strong confirmation that the company’s infrastructure is not only interesting, but is also indispensable.
When Big Tech Calls
If Microsoft was not enough to amaze the market, the Meta Platforms made it even more noticeable with its deal in November. In the deal, Nebius is going to provide AI infrastructure to Meta over a five year period, with an estimated value of about $3 billion.
Considering these contracts, it’s not surprising that management predicts the annual revenue run rate of Nebius to increase from approximately $1 billion to between $7 billion and $9 billion in 2026. At this point, Nebius is among those who are energizing the AI wave.
More Than Just a Server Rack that Does One Thing
Although AI cloud infrastructure is the main focus for Nebius, it is also growing with other businesses as well. The company’s portfolio also includes Toloka, which is focused on providing AI training and evaluation data, another business is educational technology segment, and Avride, which is a startup dedicated to creating autonomous vehicles and delivery robots. For investors, these side activities are like icing on the cake.
However, Avride may become a significant contributor to growth if the technology of autonomous delivery shifts from pilot projects to daily usage. That being said, the market has already made it quite clear that they prefer Nebius's valuation mainly due to its AI infrastructure narrative, and the expectations are already set quite high.
Bottom Line
Management has been very open, and at the same time, they are indicating an annual revenue run rate of around $8 billion at the midpoint of their 2026 guidance. Given that the stock is trading at just over three times the sales level, the valuation does not seem too high as per the current AI standards. Nevertheless, Nebius' position does not allow too many mistakes.
AI cloud infrastructure demand has to remain strong, and the company needs to perform almost perfectly to validate today's valuation. In a stock situation where the price has already tripled once, even a minor misstep could be viewed as a major issue.
While the year 2025 for Nebius was quite impressive, the seriousness of it begins in 2026. The firm possesses blue-chip clients, thrilling revenue forecasts, and a prime position in the AI infrastructure boom. Those are the positive aspects indeed.
However, the less pleasant truth is that expectations are now extremely high, and the stocks will be evaluated every quarter to see if Nebius can continue to produce or not. There is a possibility that the growth will still be ahead, but Nebius will have to struggle for it.
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