Where Will Nebius Stock Be in a Year?

Nebius Group's Growth Potential and Investment Outlook

Nebius Group (NASDAQ: NBIS) has made a significant impact on the investment landscape in the past year. An initial investment of $100 in shares of this neocloud company is now worth just over $266, reflecting a 166% gain. This impressive performance has been driven by the growing demand for artificial intelligence (AI) computing power in data centers. The company specializes in setting up dedicated AI data centers equipped with powerful graphics processing units (GPUs) from Nvidia, as well as server processors from AMD and Intel, to deliver high-performance computing.

A Business Model Designed for Growth

Nebius rents out its computing power to customers who need it to run AI workloads, store AI-related data in the cloud, train large language models (LLMs), develop custom AI solutions, and execute AI inference solutions. More importantly, the company goes beyond just providing hardware. It offers managed software services that enable customers to build and fine-tune models and inference applications.

This full-stack approach positions Nebius to capitalize on two key aspects of the AI market:

• Hyperscalers and AI companies are seeking to acquire computing power to run AI workloads in the cloud. There is a deficit in available AI computing power, which is why major cloud computing companies aren't able to fulfill their contracts. As a result, the contractual backlogs of these companies have skyrocketed.
• An increasing number of businesses, governments, and AI companies are likely to develop and deploy AI applications, both for their in-house use and for customers. This is because the technology is driving productivity gains for companies adopting it. Market research firm IDC estimates that each $1 spent on AI in 2030 could generate $4.60 in value.

Revenue Growth and Expansion Plans

The full-stack nature of its services has contributed to Nebius' rapid growth. Its revenue in the first nine months of 2025 shot up by 437% to $302 million. Moreover, Nebius also reduced its adjusted net loss by 61% during this period to $170 million.

Management expects to achieve an annualized run-rate revenue of $7 billion to $9 billion by the end of 2026. This metric is calculated by multiplying the revenue in the final month of the quarter by 12. This means sales in December 2026 could be as high as $750 million, significantly higher than what the company has generated so far in 2025.

For comparison, Nebius is expected to close 2025 with $556 million in revenue, up by 374% from last year. Analysts expect an acceleration in its top-line growth to $3.3 billion in 2026.

Major Contracts and Capacity Expansion

Nebius' ambitious revenue target seems achievable because the company has landed a couple of huge contracts from Meta Platforms and Microsoft that are likely to supercharge its growth in 2026. These two companies alone have created a revenue backlog of more than $20 billion for the company.

As a result, Nebius now plans to increase its connected data center capacity to a range of 800 megawatts (MW) to 1 gigawatt by the end of 2026. That would be a major increase over the 220 MW of connected power that it's projecting by the end of 2025. This major capacity expansion should support the incredible revenue growth that analysts are expecting from the company next year.

Valuation and Investor Concerns

Despite the stock's stunning rally in the past year, it's now trading at a costly 65 times sales. That's way higher than the U.S. technology sector's average price-to-sales ratio (P/S) of 9. However, Nebius' red-hot growth, which is set to get better next year, justifies its valuation. In fact, the company's forward sales multiples are significantly lower due to the huge growth that it is expected to deliver.

Even if Nebius trades at a significantly discounted 10 times sales (almost in line with the tech sector's average) next year and delivers $3.3 billion in revenue, its market cap could hit $33 billion. That points toward potential gains of 33% from current levels. However, this AI stock could deliver more than that since it is likely to enjoy a premium valuation due to its huge backlog, which could help it beat Wall Street's revenue expectations for 2026.

Final Considerations

Before investing in Nebius Group, it's important to consider various factors. While the company shows strong growth potential, investors should evaluate their risk tolerance and investment goals. The Motley Fool Stock Advisor analyst team has identified what they believe are the 10 best stocks for investors to buy now, and Nebius Group wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.