Nebius Up 40% in 3 Months: Should Investors Buy or Hold Now?

Core Insights - Nebius Group N.V. (NBIS) stock has increased by 40.4% over the past three months, outperforming the Zacks Computer & Technology sector and the Zacks Internet Software Services industry, which declined by 2.5% and 7.9%, respectively [2] - The company's shares rose by 10.8% in the last month [2] Investment Drivers - The stock surged 12% following NVIDIA Corporation's $2 billion investment announced on March 11, 2026, aimed at developing next-generation hyperscale AI cloud infrastructure [3] - The partnership with NVIDIA enhances Nebius' full-stack AI cloud platform and supports its goal of deploying over 5 gigawatts of AI computing capacity by 2030 [5] - Nebius announced nine new data centers in Q4 2025, securing over 2 gigawatts of contracted power, with expectations to exceed 3 gigawatts [6] - Approval from the Independence City Council for a Chapter 100 industrial development incentive plan will facilitate the construction of a 400-acre AI factory campus, potentially supporting up to 1.2 gigawatts of capacity [7] Financial Performance - Nebius' AI cloud revenue surged 830% year-over-year in Q4 2025, driven by high utilization and favorable pricing [9] - The company plans to invest between $16 billion and $20 billion in capital expenditures in 2026 to expand its AI infrastructure [14] - Despite the growth, Nebius expects EBIT losses in 2026 as it continues to expand its capacity and invest in R&D [15] Market Position and Strategy - Nebius is experiencing robust demand from large accounts, hyperscalers, AI start-ups, and enterprise customers, with significant increases in GPU usage [10] - The company is on track to exceed $4 billion in pipeline creation for Q1 2026, with longer contract durations and larger average deal sizes [11] - Nebius is expanding its AI cloud platform through organic development and acquisitions, enhancing its capabilities and developer engagement [12] Valuation - Currently, NBIS shares are trading at a Price/Book ratio of 5.9X, which is higher than the Internet Software Services industry's average of 2.91X [18]