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Nebius Group Shares Jump on Analyst Upgrade Amid Explosive AI Infrastructure Growth
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Analyst Upgrade Triggers Intraday Surge
BNP Paribas analyst Stefan Slowinski raised Nebius Group’s price target from $260 to $399 before the stock reached the prior target, prompting an upgrade from neutral to a buy rating. The announcement sent Nebius shares up roughly 9.5% by early afternoon, adding to a year-to-date gain of more than 180% (source: analyst commentary).
Financial Performance and Backlog Strength
Nebius reported that revenue in the first six months of 2026 surged 529% to $981 million, while adjusted net loss narrowed 24% to $133.5 million. In the most recent quarter, net loss fell 64% year over year to $33.2 million. The company disclosed that total contract value rose four-fold sequentially, with four deals averaging over $1 billion each and an average contract value per megawatt exceeding $20 million in Q2, climbing above $40 million in Q3. Nebius’ backlog now tops $40 billion, underpinning the revenue outlook.
Business Model: Prepayments and Token Factory Boost Margins
Approximately 70% of Q2 contracts included upfront payments, positioning Nebius to receive more than $9 billion in customer prepayments this year. These prepayments reduce the need for equity or debt financing to fund new AI-focused data centers. In parallel, the Token Factory software platform, which enables customers to run AI models and inference workloads, saw usage triple in the last quarter, contributing to a higher gross margin of 18.81%.
Valuation and Future Revenue Run-Rate Projections
Nebius trades at roughly 48 times sales, far above the Nasdaq Composite’s 5.4-times price-to-sales ratio. Analysts project annualized run-rate revenue (ARR) to climb from $3 billion in June to $7-$9 billion by the end of 2026. Assuming a conservative 10-times sales multiple and revenue of $23.5 billion in 2028, the market cap could reach about $235 billion—approximately 3.6 times the current valuation.
Outlook and Investor Considerations
The commentary emphasizes that Nebius’ rapid revenue expansion, sizable backlog, and prepayment strategy are driving the stock’s momentum. However, the premium valuation and reliance on continued AI demand suggest heightened risk for investors. Prospective buyers are advised to weigh the growth prospects against the elevated price-to-sales multiple and the company’s ongoing net-loss position.
