NBIS Q2 Earnings Coming Up: How Should You Play the Stock?

Core Insights - Nebius Group N.V. (NBIS) is set to report its Q2 2025 results on August 7, with a consensus estimate of a loss of $0.42 and total revenues of $95.05 million [1][10] Company Overview - Nebius, based in Amsterdam, is focused on AI infrastructure, operating an AI-powered cloud platform for intensive AI and ML workloads [2] - The company resumed trading as a public entity in October 2024 [2] Earnings Predictions - The current model does not predict an earnings beat for NBIS, with an Earnings ESP of 0.00% and a Zacks Rank of 4 (Sell) [3][4] Revenue and Growth Factors - Accelerating demand for AI infrastructure services is expected to positively impact revenue, with annualized recurring revenues (ARR) for April reported at $310 million, supporting a full-year ARR guidance of $750 million to $1 billion for 2025 [5] - Nebius is expanding its data center footprint and GPU deployments in the U.S. and Europe, which is expected to enhance service delivery and reduce latency [6] Infrastructure and Client Integration - Significant upgrades to AI cloud infrastructure and improved object storage capabilities are anticipated to lower time-to-result for end users [7] - Expanded integrations with external AI platforms are likely to attract more clients [7] Competitive Landscape - Nebius faces intense competition from major players like Amazon and Microsoft, which dominate over half of the cloud services market [8] Financial Performance and Projections - Despite strong revenue growth, Nebius remains unprofitable, with adjusted EBITDA expected to be negative for the full year 2025, although it may turn positive in the second half of the year [11] - The company has raised its 2025 capital expenditure forecast to approximately $2 billion, indicating high capital intensity [11] Deconsolidation Impact - Nebius will deconsolidate Toloka due to a drop in voting share below 50%, which will affect its financials and guidance in the upcoming earnings report [12] Stock Performance - Nebius shares have increased by 59.6% over the past six months, outperforming the Zacks Computer & Technology sector and the S&P 500 [13] - Compared to peers, Nebius has shown better performance than Microsoft but less than CoreWeave, which gained 165% [18] Valuation Concerns - The stock is considered to have a stretched valuation, with a Price/Book ratio of 4.04, similar to the industry average [19][20]