Did Nvidia's CEO Just Deliver the Ultimate Buy Signal for Nebius?

Group 1: Company Overview - Nebius Group (NASDAQ:NBIS) is forecasting up to 1,600% revenue growth by the end of 2026, driven by surging demand for AI compute infrastructure, with projected annualized revenue run rate of $900 million to $1.1 billion for the end of 2025 and $7 billion to $9 billion by the end of 2026 [1] - The company has secured major contracts, including a multi-year deal with Microsoft valued at over $19 billion and a $3 billion partnership with Meta Platforms over five years [2] - Nebius is expanding its capacity from 220 megawatts (MW) to 800 MW and up to 1 gigawatt (GW) of connected power by the end of 2026, with contracted power reaching 2.5 GW [2] Group 2: Market Dynamics - The supply of the latest generation of AI chips remains sold out into 2026, with Nvidia's H200 chips seeing orders exceeding current stock, driven by explosive demand for AI training and inference [4] - Companies are forced to rent older-generation chips due to this scarcity, with increased utilization of two-generation-old GPUs and rising GPU instance prices reflecting the tight market [5] - Jensen Huang, CEO of Nvidia, highlighted rising spot prices for GPU rentals, indicating real demand from new AI startups and companies reallocating R&D budgets, which counters previous price declines [6] Group 3: Financial Implications - Rising spot prices directly benefit Nebius by enabling higher per-hour charges on its GPU rentals, boosting revenue and margins, with a stable baseline from its Microsoft and Meta contracts [8] - Analysts project a 15% to 25% short-term revenue uplift for Nebius, pushing growth over the next 12 months to 339% and potentially exceeding $4 billion in annualized run rate if prices hold [9] - Other companies like IREN and Cipher Mining are also benefiting from rising GPU spot prices, with projected revenue increases due to dynamic pricing and significant contracts [11][12]