Nebius targets – Nebius Group says its AI cloud business could drive ARR to $7 billion to $9 billion by 2026, implying a 540% jump from end-2025 levels. With $46 billion-plus in five-year contracts and an expanding software stack, the company argues its stock still has room to
Nebius isn’t trying to survive the AI data center boom. It’s trying to cash in before the market looks up.
The company. which builds dedicated AI data centers equipped with powerful graphics cards and rents capacity to hyperscalers and AI customers. has been growing fast as major buyers line up for cloud computing power. But after the stock rally this year. investors are asking a harder question: does the momentum still leave enough upside—or has the valuation already priced in the future?.
Nebius ended 2025 with an annualized run rate revenue (ARR) of $1.25 billion. That figure represented a 14x increase over its ARR at the end of 2024. The company calculates ARR by multiplying its AI cloud revenue from the last month of a quarter by 12.
Now it is pointing to a dramatically higher finish line. Nebius expects to exit 2026 with ARR in a range of $7 billion to $9 billion. If you take the midpoint of that guidance range. Nebius is effectively projecting that its ARR could rise 540% by the end of 2026 compared with the reading at the end of 2025.
That kind of growth pitch rests on two practical pillars: signed commitments and a revenue pipeline that is strengthening.
Nebius says it has signed contracts worth more than $46 billion with Meta Platforms and Microsoft for providing dedicated AI data center capacity over the next five years. It also reports that its cloud revenue pipeline increased by 3.5x quarter over quarter in Q1. excluding deals it has signed with hyperscalers such as Meta and Microsoft.
The company also forecasts $3.2 billion in revenue in 2026, and ties its outlook to that backlog and improving pipeline.
Even the market math offered alongside the forecast points to why some investors still see room for the shares. If Nebius’ revenue hits $20.4 billion in 2028 on the strength of its massive backlog—and if the company trades at the same sales multiple as the Nasdaq Composite index—its market cap could reach $114 billion. By that estimate, gains could be significant from Nebius’ current market cap of $67 billion.
But valuation isn’t only about hardware and capacity. Nebius is also selling a software stack, and it’s positioning that part of the business to become a bigger driver.
Beyond building and renting AI data centers, Nebius offers software that helps customers build AI agents, develop custom AI software, run inference tasks, and build models to their needs. Customers can buy tokens to access popular large language models (LLMs) on its platform.
The company says its software solutions serve multiple industries, including healthcare, life sciences, media & entertainment, robotics and physical AI, and retail & commerce. Nebius also anticipates that its software solutions will become a larger part of its revenue mix in the future.
While it does not specify exactly how much revenue the software segment generates. it points to margin improvements as evidence the shift is already helping. Nebius’ adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) margin landed at 32% in the first quarter of 2026. That compares with a negative margin of 106% in the year-ago period.
The demand side also matters for how that margin story could evolve. Nebius is seeing improving demand for inference-focused tokens. and the logic behind the optimism is straightforward: AI inference applications are growing rapidly. The expectation is that stronger inference demand can translate into stronger software-related activity over time.
With that earnings trajectory in mind, the bullish view extends beyond revenue. The scenario laid out for earnings suggests the stock could trade at a premium to the Nasdaq Composite index’s average price-to-earnings ratio of 42 over the next couple of years.
So even after the stock rally this year, the argument is that the market may still be underpricing the combination of a huge revenue backlog, a rapidly expanding pipeline, and a software stack that could lift both growth and profitability.
There is one more detail that frames how investors are weighing risk right now: Nebius is described as trading at 80 times sales. versus the Nasdaq Composite index’s price-to-sales ratio of 5.6. The tension is clear—if growth delivers as forecast, that gap can look survivable. If it doesn’t, investors may find themselves paying too much for progress that takes longer than expected.
Should you buy Nebius Group stock right now? The debate is already live, and it turns on whether the company’s guidance and backlog can keep translating into the kind of revenue and earnings expansion the numbers suggest.
Before any purchase. the source urges readers to consider that the Motley Fool Stock Advisor analyst team identified what they believe are the 10 best stocks for investors to buy now—and Nebius Group wasn’t one of them. The note also mentions that Stock Advisor’s total average return is 978% compared with 211% for the S&P 500. with returns as of June 2. 2026. and that the Motley Fool has positions in and recommends Meta Platforms and Microsoft. Harsh Chauhan has no position in any of the stocks mentioned.
Nebius NBIS AI data centers revenue growth ARR hyperscalers Meta Microsoft inference tokens EBITDA margin undervalued stock