Key Takeaways Nebius saw AI cloud revenue jump 830% YoY and 63% sequentially in Q4 amid strong demand.NBIS secured major deals from NVIDIA, Meta and Microsoft to expand AI capacity and partnerships.Nebius plans $16B-$20B capex in 2026, with losses expected as it scales infrastructure aggressively.The AI infrastructure boom is giving rise to a new wave of cloud challengers, with Nebius Group N.V. (NBIS) and CoreWeave, Inc. (CRWV) emerging as two prominent players in the race to power next-generation workload ...

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]

Core Insights - The partnership between CoreWeave, Inc. (CRWV) and Perplexity aims to enhance AI innovation and scale advanced inference workloads, addressing the growing demand for powerful infrastructure in the generative AI ecosystem [1][8] - Perplexity's AI products require consistent performance under heavy load, making CoreWeave an ideal infrastructure partner for hosting its AI inference workloads [2] - CoreWeave will utilize dedicated NVIDIA GB200 NVL72 clusters to support Perplexity's Sonar and Search API ecosystem, which powers its AI-driven search services [2][8] Partnership Dynamics - Perplexity has begun deploying inference workloads using CoreWeave Kubernetes Service and is also leveraging Weights & Biases (W&B) Models for managing its AI development lifecycle [3] - CoreWeave will adopt Perplexity Enterprise Max internally to enhance productivity and decision-making across its teams, indicating a mutually beneficial relationship [3] Market Position and Competitiveness - CoreWeave faces challenges related to heavy capital spending and profitability, but partnerships like the one with Perplexity strengthen its long-term growth trajectory [4] - The competitive landscape includes Nebius Group N.V. (NBIS), which is experiencing strong demand and expanding its AI cloud platform through organic development and acquisitions [5] - Microsoft (MSFT) maintains a strong position in the cloud market with Azure, holding about 25% of the enterprise cloud market, supported by its integration with enterprise software and consistent revenue growth [6] Financial Performance - CoreWeave's shares have gained 98.8% over the past year, contrasting with a 10.3% decline in the Internet Software industry [7] - The current Price/Book ratio for CRWV is 7.92X, higher than the industry average of 5.18X, indicating a premium valuation [10] - The Zacks Consensus Estimate for CRWV's earnings has remained unchanged over the past 60 days, reflecting stability in earnings expectations [11]

Core Insights - The rapid rise of artificial intelligence (AI) is reshaping the cloud computing sector, with AI-enabled infrastructure becoming a focal point for investors [1] - Nebius Group N.V. (NBIS) and Alphabet Inc. (GOOGL) represent two different strategies in the AI cloud market, with Nebius focusing on specialized AI cloud services and Alphabet leveraging its diversified ecosystem [1] Market Overview - The global cloud AI market was valued at approximately $121.74 billion in 2025 and is projected to grow to $1,728.40 billion by 2033, reflecting a compound annual growth rate (CAGR) of 39.3% from 2026 to 2033 [2] - This growth trend benefits both Alphabet and Nebius, but the impact is not uniform across both companies [2] Nebius Group N.V. (NBIS) - Nebius is experiencing strong demand from large accounts, hyperscalers, AI startups, and enterprise clients, with GPU usage increasing significantly [3] - The company reported an 830% year-over-year revenue increase in its core AI cloud business for Q4 2025, with adjusted EBITDA turning positive and margins expanding to 24% [4] - Nebius is expanding its AI cloud platform through organic growth and strategic acquisitions, with a strong sales pipeline projected to exceed $4 billion in Q1 2026 [5][6] - The company plans to invest between $16 billion and $20 billion in capital expenditures in 2026, which poses risks if revenue growth does not align with this capital-intensive strategy [7] Alphabet Inc. (GOOGL) - Google Cloud's revenue grew 35.8% year-over-year to $58.71 billion in 2025, driven by investments in infrastructure and AI services [10] - Alphabet is enhancing its AI capabilities with products like Gemini and advanced infrastructure, which are expected to sustain robust revenue growth [11] - The company has a diversified business model that reduces reliance on any single revenue stream, with advertising revenues rising 11.4% year-over-year to $294.69 billion in 2025 [13] - Despite strong growth, Alphabet faces challenges such as regulatory scrutiny and rising costs associated with AI investments [15] Valuation and Performance - Nebius shares are trading at a Price/Sales ratio of 50.26X, while Alphabet's is significantly lower at 9.5 [21] - Analysts have revised earnings estimates downward for Nebius, while there have been significant upward revisions for Alphabet [22][24] - Both companies currently hold a Zacks Rank 3 (Hold), but GOOGL is viewed as the stronger investment option due to its scale and diversified revenue [25]

Core Viewpoint - Nebius Group N.V. (NASDAQ:NBIS) is recognized as one of the top stocks to buy in 2026, with analysts providing positive ratings and price targets indicating significant upside potential [1][2]. Group 1: Analyst Ratings and Price Targets - BWS Financial analyst Hamed Khorsand reiterated a Buy rating on Nebius Group N.V. with a price target of $130 [2]. - Morgan Stanley analyst Josh Baer maintained a Hold rating on the stock, setting a price target of $126 [3]. Group 2: Company Performance and Strategy - During the fourth-quarter 2025 earnings call, management highlighted that 100% of AI cloud customers currently use their software, with an attach rate also at 100% [3]. - The company introduced new products, such as Token Factory and Aether, which are expected to create new opportunities [3]. - The acquisition of Tavily is anticipated to enhance the platform's capabilities [3]. - The CFO expressed confidence in the high demand for their AI cloud business, aiming to achieve a 40% margin by offsetting losses in smaller segments through proper investment [3]. Group 3: Company Background - Nebius Group N.V. was founded in 1989 and underwent restructuring in 2024, positioning itself as a leading AI infrastructure provider based in the Netherlands [4].

Core Insights - Nebius Group N.V. (NBIS) aims for an annualized run rate (ARR) revenue of $7 billion to $9 billion by the end of 2026, with expected revenue for 2026 between $3 billion and $3.4 billion [1] Financial Performance - In 2025, Nebius exceeded its ARR guidance, achieving over $1.2 billion, driven by strong demand from large accounts, hyperscalers, and AI-native start-ups [2] - The company anticipates a pipeline growth exceeding $4 billion in the first quarter of 2026, with new customer contract durations increasing by 50% [2] Strategic Partnerships - Nebius delivered the first tranche of its Microsoft commitment on schedule in November, with full annual run rate revenue from Microsoft expected to begin in 2027 [3] Growth Drivers - The growth of Nebius is fueled by the expansion of its AI cloud platform through organic development and acquisitions, including the launch of Token Factory and Aether, and the acquisition of Tavily [4] - The company has announced nine new data centers and secured over 2 gigawatts of contracted power, with expectations to surpass 3 gigawatts [5] Competitive Landscape - Nebius faces intense competition from hyperscalers and specialized AI infrastructure providers, making disciplined execution and differentiated platform capabilities critical for long-term growth [6] Market Position - Nebius shares have gained 50.8% in the past six months, contrasting with a 9.9% decline in the Internet – Software and Services industry [11] - The company's shares are trading at a price/book ratio of 5.56X, higher than the industry average of 3.41X [12]

Core Insights - CoreWeave (CRWV) has experienced a remarkable revenue growth of 134% year-over-year, reaching $1.4 billion in Q3 2025, while its entry into the federal market is a significant development [1][10] Expansion into Federal Market - CoreWeave has launched CoreWeave Federal, aimed at providing AI cloud services to U.S. government agencies and the defense industrial base, ensuring compliance with cybersecurity standards [2] - Early adoption by NASA's Jet Propulsion Lab demonstrates the platform's capabilities and potential for broader use across various federal agencies [3] Market Opportunity - The entry into the public sector expands CoreWeave's addressable market at a time when AI adoption is accelerating, particularly among government agencies focused on an AI-first strategy [4] - CoreWeave ended Q3 with a substantial backlog of $55.6 billion, including $50 billion in Remaining Performance Obligations (RPO), indicating strong future demand [5] Infrastructure and Capacity - CoreWeave operates nearly 590 megawatts of active power and has 2.9 gigawatts of contracted capacity, with over 1 gigawatt available for future sales, making it well-positioned for long-term federal contracts [6] Competitive Landscape - The AI infrastructure market is highly competitive, with established players like Microsoft and emerging companies like Nebius vying for market share [7] - Microsoft has a strong foothold in the public sector with its Azure for US Government, which is tailored for federal workloads and has critical accreditations [11] - Nebius has shown rapid revenue growth of 355% year-over-year, but its federal market penetration is still developing compared to Microsoft [12] Financial Performance - CoreWeave's shares are trading at a Price/Book ratio of 10.8X, significantly higher than the Internet Software industry's ratio of 5.82X, with shares down 19.8% over the past month [14]

Financial Data and Key Metrics Changes - Q3 group revenue reached $146 million, representing a year-over-year increase of nearly 355% and a quarter-over-quarter increase of 39% [7] - Annualized run rate revenue for the core business at the end of September was $551 million, with the core infrastructure business growing 400% year-over-year and 40% sequentially [7] - Adjusted EBITDA margin for the core infrastructure business expanded quarter-over-quarter to nearly 19% [7] - The company raised its 2025 CapEx guidance from approximately $2 billion to around $5 billion, reflecting strong demand outlook [10] Business Line Data and Key Metrics Changes - The core infrastructure business accounted for nearly 90% of total revenue, with significant growth attributed to capacity constraints limiting revenue growth [7] - The company sold out all available capacity in Q3, indicating strong demand for its services [2][7] Market Data and Key Metrics Changes - The company signed a major deal with Meta valued at approximately $3 billion over the next five years, following a previous deal with Microsoft valued between $17.4 billion and $19.4 billion [3][12] - The demand environment is described as overwhelming, with a 70% quarter-on-quarter expansion in pipeline generation [22] Company Strategy and Development Direction - The company is focused on building its core AI cloud business while also pursuing large long-term deals to support growth [3][4] - Plans to grow contracted power to 2.5 gigawatts by the end of 2026, up from 1 gigawatt previously discussed [4][10] - The launch of new enterprise-ready cloud platform version 3.0, called Aether, aims to expand the addressable market opportunity [5] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving an annualized run rate revenue of $7 billion to $9 billion by the end of 2026, driven by strong demand and capacity expansion [6][17] - The company remains focused on maintaining healthy margins and a sustainable business model while navigating the AI revolution [42][63] Other Important Information - The company is actively evaluating financing options, including corporate debt, asset-backed financing, and equity, to support aggressive growth plans [8][32] - The company plans to file a prospectus supplement for an at-the-market equity program for up to 25 million Class A shares [8] Q&A Session Summary Question: Can you tell us more about the new Meta deal? - The Meta deal is approximately $3 billion, limited by available capacity, indicating potential for larger deals if capacity were available [12][13] Question: What is included in the $7 billion-$9 billion ARR target? - The target includes contracted power and demand from AI startups and enterprises, with more than half already booked [15][17] Question: What is the timeline for infrastructure build-out? - The company is ramping up capacity in various regions, with new data centers expected to come online in 2026 [18][19] Question: How will the Microsoft and Meta deals impact revenue? - Revenue from Microsoft will ramp up in 2026, while Meta's deployments are expected to conclude in the next three months [21] Question: What does the demand environment look like? - Demand is accelerating, with a 70% increase in pipeline generation in Q3 [22] Question: What are the constraints to growing capacity? - The main bottleneck is securing power and supply chain issues, which the company is actively addressing [38] Question: How is the enterprise initiative progressing? - The company is making strides in becoming enterprise-ready, with new functionalities and compliance certifications [48][49] Question: What is the opportunity around the Token Factory? - The Token Factory aims to serve a broader set of customers, enabling enterprises to build AI applications at scale [50][52]

Financial Data and Key Metrics Changes - Q3 group revenue reached $146 million, representing a year-over-year increase of nearly 355% and a quarter-over-quarter increase of 39% [7] - Annualized run rate revenue for the core business at the end of September was $551 million, with the core infrastructure business growing 400% year-over-year and 40% sequentially [7][9] - Adjusted EBITDA margin for the core infrastructure business expanded to nearly 19% quarter-over-quarter [7] Business Line Data and Key Metrics Changes - The core infrastructure business accounted for nearly 90% of total revenue, with significant growth attributed to capacity constraints limiting revenue growth [7][9] - The company sold out all available capacity in Q3, indicating strong demand and a bottleneck in revenue growth due to capacity limitations [2][4] Market Data and Key Metrics Changes - The company signed a major deal with Meta valued at approximately $3 billion over the next five years, following a previous deal with Microsoft valued between $17.4 billion and $19.4 billion [3][12] - The demand environment is characterized by overwhelming interest in capacity, with a 70% quarter-on-quarter expansion in pipeline generation [22] Company Strategy and Development Direction - The company is focused on building its core AI cloud business while also pursuing large long-term deals to support growth [3][4] - Plans to grow contracted power to 2.5 gigawatts by the end of 2026, up from 1 gigawatt previously discussed, with significant investments in capacity and infrastructure [4][10] - The launch of new enterprise-ready cloud platform version 3.0, called Aether, and the inference platform Nebius Token Factory aims to expand the addressable market [5][6] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving an annualized run rate revenue of $7 billion to $9 billion by the end of 2026, driven by strong demand and capacity growth [6][17] - The company remains focused on maintaining healthy margins and a sustainable business model while navigating the rapid growth in the AI sector [42][63] Other Important Information - The company is raising its 2025 CapEx guidance from approximately $2 billion to around $5 billion to support aggressive growth plans [10] - The company is actively evaluating financing options, including corporate debt, asset-backed financing, and equity, to support its growth strategy [8][32] Q&A Session Summary Question: Can you tell us more about the new Meta deal? - The Meta deal is approximately $3 billion, limited by available capacity, indicating strong demand for larger contracts [12][13] Question: What is included in the $7 billion-$9 billion ARR target? - The target includes contracted power and existing capacity, with more than half already booked [15][17] Question: What is the timeline for infrastructure build-out? - The company is ramping up capacity in various regions, with new data centers expected to come online in 2026 [18][19] Question: How will Microsoft and Meta revenue contribute in 2025? - Microsoft revenue will ramp up in 2026, while Meta is expected to reach full revenue run rate in 2026 [21] Question: What does the demand environment look like? - Demand is accelerating, with a 70% increase in pipeline generation in Q3 [22] Question: Why is incremental ARR down? - Incremental ARR decreased due to capacity constraints, but is expected to increase significantly in Q4 [24] Question: How is the U.K. facility progressing? - The U.K. facility is progressing well, with strong demand leading to pre-sold capacity [35][36] Question: What is the company's approach to financing? - The company is focused on maintaining a disciplined capital structure while exploring various financing options [32][34] Question: How is the enterprise initiative ramping up? - The company is making strides in becoming enterprise-ready with new product launches and compliance certifications [48]

Financial Data and Key Metrics Changes - Q3 group revenue reached $146 million, representing a year-over-year increase of nearly 355% and a quarter-over-quarter increase of 39% [9] - Annualized run rate revenue for the core business at the end of September was $551 million, with the core infrastructure business accounting for nearly 90% of total revenue and growing 400% year-over-year [9] - Adjusted EBITDA margin for the core infrastructure business expanded quarter-over-quarter to nearly 19% [9] Business Line Data and Key Metrics Changes - The core infrastructure business was the primary driver of revenue growth, with significant contributions from mega deals with Microsoft and Meta [4][9] - The company sold out all available capacity, indicating that revenue growth was limited only by the capacity brought online [9] Market Data and Key Metrics Changes - The demand environment in Q3 was described as very strong, with a 70% quarter-on-quarter expansion in pipeline generation [24] - The company expects to achieve a contracted power of 2.5 gigawatts by the end of 2026, up from 1 gigawatt discussed in the previous earnings call [5][11] Company Strategy and Development Direction - The company is focused on building its core AI cloud business while also pursuing large long-term deals with major clients [4][6] - Investments are being made to secure critical infrastructure, including hardware and power, with a CapEx guidance increase from approximately $2 billion to around $5 billion for 2025 [12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving an annualized run rate revenue of $7 billion to $9 billion by the end of 2026, driven by strong demand and accelerated capacity growth [6][19] - The company remains focused on maintaining healthy margins and a sustainable business model while navigating the rapidly growing AI market [44] Other Important Information - The company launched its new enterprise-ready cloud platform version 3.0, called Aether, and a new inference platform called Nebius Token Factory, aimed at expanding its addressable market [6] - The company is actively evaluating financing options, including corporate debt, asset-backed financing, and equity, to support its growth plans [10][34] Q&A Session Summary Question: Can you tell us more about the new Meta deal? - The new deal with Meta is approximately $3 billion, limited by the capacity available. The company is optimistic about signing more large deals in the future [14] Question: What exactly is in the $7 billion-$9 billion ARR target? - The target includes contracted power and demand from AI startups and enterprises, with more than half already booked [17][19] Question: What gives you confidence that you can reach your 2.5 gigawatts goal of contracted capacity? - The company is ramping up capacity in various regions, including the U.K. and Israel, and has secured a roadmap for 2.5 gigawatts of power [20][21] Question: How should we think about revenue contribution from Microsoft and Meta deals for this year and going forward? - Revenue from Microsoft will ramp up in 2026, while Meta's deployments are expected to conclude in the next three months, with full revenue run rate anticipated in 2026 [22] Question: What does the overall demand environment look like in Q4 and into the next year? - The demand profile is accelerating, with a significant increase in pipeline generation and strong confidence in future growth [24] Question: How are you thinking about CapEx and what is your philosophy on CapEx spending? - The company plans to secure as much capacity as possible, with a focus on building infrastructure in line with visible demand [27][29] Question: Is there any chance that GPUs are oversupplied in the coming year? - The company believes the market will remain supply constrained at least until 2026, with a conservative approach to capital spending [65]