Nebius Stock Up Post Q4 Earnings: Buy, Stay Invested or Offload?

Core Insights - Nebius Group N.V. (NBIS) stock increased by approximately 10% following its fourth-quarter 2025 results, driven by strong revenue growth in a robust AI demand environment [1] - Over the past three months, NBIS shares have gained 14%, outperforming the Zacks Computer & Technology sector, which remained flat, and the Zacks Internet Software Services industry, which declined by 11.2% [1] - The company's shares have surged 35.1% in the past six months [1] Financial Performance - In Q4 2025, Nebius reported an adjusted net loss of $173 million, which is 151% wider than the loss of $69 million from the previous year [3] - Revenues surged by 547% year over year to $227.7 million, primarily driven by strong performance in the core business [3] - The AI cloud business revenue increased by 830% year over year and 63% sequentially, supported by high utilization levels and favorable pricing [4][6] Future Guidance - Nebius projects 2026 revenue between $3 billion and $3.4 billion, targeting a run-rate of $7 billion to $9 billion by the end of 2026 [6][8] - The company plans to invest $16 billion to $20 billion in capital expenditures in 2026 to expand data centers [6][16] - The adjusted EBITDA margin for the group turned positive in Q4, expanding to 24% from 19% in the previous quarter [7] Market Demand and Strategy - Nebius continues to experience robust demand from large accounts, hyperscalers, AI start-ups, and enterprise customers, with a growing pipeline expected to exceed $4 billion in Q1 2026 [10][12] - The company announced plans for nine new data centers and secured over 2 gigawatts of contracted power, with expectations to exceed 3 gigawatts [11] - The software attach rates for AI cloud customers are at 100%, indicating strong engagement [13] Competitive Landscape - Nebius has outperformed peers like Microsoft Corporation (MSFT) and Amazon.com, Inc. (AMZN), which saw declines of 20.8% and 14.7%, respectively, while CoreWeave, Inc. (CRWV) increased by 27.5% during the same period [2] - The company is navigating a competitive environment with rising capital expenditures and supply-chain pressures affecting peers [16][17][18] Valuation - Currently, NBIS shares are trading at a Price/Book ratio of 5.35X, which is higher than the Internet Software Services industry's average of 3.38X [19]