AI cloud provider Nebius Group NV (NASDAQ: NBIS) reported first-quarter revenue of $399 million, a 684% year-over-year increase that significantly beat analyst expectations, driven by surging demand for its AI data centers.
The company also announced it has secured up to 1.2 gigawatts of power and land for a new, owned AI factory at a site in Pennsylvania. A letter from founder and CEO Arkady Volozh to shareholders was published on the company's investor relations website.
The results showed a significant outperformance compared to analyst forecasts, which had pinned revenues at $316.9 million and estimated a loss of 81 cents per share. The company reported adjusted earnings before interest, taxes, depreciation, and amortization of $129.5 million, a sharp reversal from a loss during the same period last year.
The strong performance reflects high utilization and strong pricing in a supply-constrained GPU market. Nebius has been aggressively expanding its global data-center footprint, with management noting on its last earnings call that capacity was sold out through the first quarter of 2026. The company raised its contracted power target to more than 3 gigawatts for 2026.
Growth is further supported by a $2 billion investment from NVIDIA (NASDAQ: NVDA) in March 2026, which provides Nebius with access to next-generation GPUs. Nebius is also expanding its platform through acquisitions, including a recent deal to acquire AI inference optimization firm Eigen AI for approximately $643 million.
Despite the rapid growth, which has seen shares surge 431% over the past year, some analysts point to risks. The company faces heavy capital spending requirements, with plans to invest $16-$20 billion in 2026, and a stretched valuation, with its Price-to-Book ratio of 9.75 trading significantly higher than the industry average of 3.9, according to Zacks Investment Research. Competition also remains a factor from companies like CoreWeave, Inc.
The massive revenue beat and new factory announcement show Nebius is capitalizing on the AI infrastructure boom. Investors will watch for details on the Pennsylvania facility's development timeline and the integration of the recent Eigen AI acquisition.
This article is for informational purposes only and does not constitute investment advice.
