Key Takeaways:
Nebius Group reported Q2 revenue of $582.3 million, up 454% from a year earlier and above the $574 million consensus, sending shares up 23%.
"Demand for AI capacity continues to grow exponentially, and we are converting that demand into contracted, profitable growth," Chief Executive Officer Arkady Volozh said.
The company posted a GAAP net loss of $0.68 a share, narrower than the $0.70 loss analysts expected and versus a $2.05 profit a year earlier. Nebius closed four contracts averaging more than $1 billion in total contract value each, including deals with AI startup Cohere and a large US quantitative trading firm. Management reaffirmed full-year 2026 revenue guidance of $7 billion to $9 billion.
Shares rose 23% to $238.60, adding to a 131% gain this year. The company raised its year-end contracted capacity forecast to 5 gigawatts from 4 gigawatts, with the payback period on new capacity shortening to one year and 10 months from two to three years.
The results landed as the broader AI cloud trade reaccelerated. CoreWeave, the US rival backed by Nvidia, jumped 21% after reporting Q2 revenue of $2.58 billion, up 112%, and lifting its backlog above $104 billion. Chief Executive Officer Michael Intrator said the company had signed an additional $25 billion in customer commitments in early Q3. Nebius, which also counts Nvidia as an investor, said Q2 total contract value quadrupled from the prior quarter, with new-customer deals up ninefold.
Deal economics strengthened during the quarter. Nebius said contracts carried an average yield of more than $20 million per megawatt, with 70 percent including prepayments covering 50 percent to 60 percent of associated capital expenditure. The company sees price per megawatt rising to the $40 million to $50 million range and signed its first deal at those prices this week.
The valuation remains stretched. Nebius trades at 65.5 times sales, far above its five-year median of 6.8 times, with a market capitalization of $49.06 billion. Insiders sold $138.8 million of stock over the past three months with no purchases, while seven tracked gurus added to their positions, a divergence that leaves the stock exposed to sentiment shifts.
The revenue beat and capacity raise signal management expects AI demand to keep accelerating. Investors will watch whether the multibillion-dollar contracts convert into profit as capacity comes online in late 2026, and how the market prices the stock against a short position disclosed by investor Michael Burry.
This article is for informational purposes only and does not constitute investment advice.
