Nebius: A Software Company The Market Insists On Renting Out

Nebius Group is rated a buy with 15-20% upside, driven by a shift from GPU rental to full-stack AI cloud ownership. NBIS posted 840% AI cloud revenue growth and a 45% EBITDA margin, signaling a successful transition to higher-margin, software-driven offerings. Anchor contracts with Meta and Microsoft underpin a $20-25B capex plan, securing funding and reducing demand risk while building a structural moat with 4 GW of contracted power. Despite customer concentration and financing risks, NBIS's rapid growth, premium positioning, and strong backlog support a re-rating and continued outperformance.

There is a lot of focus on GPU counts and capex burn when it comes to Nebius Group (NBIS), which is warranted given the scale of the buildout. But most of this commentary