NBIS Stock Forecast & Price Target

Nebius Group achieved remarkable total revenue of $146.1 million, reflecting a year-over-year growth of 237%, primarily driven by robust performance in its core operations. The significant multiyear $17 billion agreement with Microsoft is expected to enhance Nebius's revenue potential by providing a higher-quality backlog and exploring additional high-profile deals. With management projecting an annualized revenue run-rate between $7-9 billion by the end of CY26 and the capability to generate double-digit returns on capital due to operational efficiencies, Nebius positions itself favorably in the cloud computing market.

Nebius Group's negative outlook is primarily driven by its inability to meet demand, resulting in a lowered revenue guidance of approximately $525 million for 2025, highlighting significant operational challenges. The company faces hurdles in scaling profitably, amplified by the necessity to attract enterprise customers amid geopolitical and regulatory risks stemming from its association with Yandex, which could hinder long-term stability. Additionally, despite a substantial revenue backlog exceeding $20 billion, Nebius's valuation is concerning as it trades at less than 1x backlog, raising questions about its core business viability and competition with established hyperscalers.