By Nebius Group reported second-quarter results before the open on Wednesday, and the stock surged about 18% to around $233. The report did more than beat estimates. It answered the specific question that had been hanging over the stock through a sharp pre-earnings pullback: whether the company’s enormous spending on AI data centers was outrunning its ability to fill them with paying customers.
The answer was no. Revenue rose 454% year over year, the company closed four AI-cloud contracts each worth more than $1 billion, and it raised its target for how much computing capacity it will have under contract by year-end. For a stock that had fallen 16% in the week before the print on exactly the “can they justify the capex” worry, the numbers reversed the narrative in a single session.
Nebius (NBIS) jumped about 18% to near $233 after its Q2 report, reversing a pre-earnings pullback as the results answered the market’s capex-versus-revenue concern. Source: Yahoo FinanceThe Numbers That Reversed the Narrative
The headline figures beat across the board. Nebius reported revenue of $582.3 million, up 454% from $105.1 million a year earlier and ahead of the $572.75 million analysts expected. The GAAP net loss came to $0.68 a share, but that beat the roughly $0.86 loss analysts had penciled in, and it lands at the better end of the wide estimate range the market had going in. Stripped of one-time and non-cash items, the adjusted net loss was just $33.2 million, or about $0.12 a share, a fraction of the headline figure and a sharp narrowing from a $91.5 million adjusted loss a year earlier.
The profitability turn was the standout. Adjusted EBITDA reached $236.2 million, swinging from a $21 million loss in the same quarter last year, and the core AI-cloud business posted an adjusted EBITDA margin of 49.7%. AI cloud, which now accounts for about 98% of total revenue, generated $574.9 million, up 514% year over year. This is a company whose core operation is not just growing explosively but has crossed into strong profitability on the measure that matters most for an infrastructure business.
The Backlog That Silenced the Capex Doubt
The capex question was the crux going in, and the contract news is what settled it. During the quarter Nebius closed four AI-cloud deals averaging more than $1 billion each, with total contract value nearly quadrupling from the prior quarter and new-customer contract values jumping more than ninefold. Annualized run-rate revenue reached $3 billion, up 56% from $1.9 billion at the end of March.
That backlog is the direct answer to the bear case. A company spending heavily to build data centers has to prove the capacity will be filled, and four billion-dollar contracts in a single quarter is about as concrete a proof as the market could ask for. CEO Arkady Volozh framed it as converting demand into “contracted, profitable growth,” and management went further, saying it could sell out all of its planned 2027 capacity at current terms today but was deliberately holding some back to capture future demand at potentially better prices.
Nebius also raised its year-end 2026 contracted-power target to 5 gigawatts, up from more than 4, and reaffirmed full-year revenue guidance of $3 billion to $3.4 billion. The preview to this Nebius report framed backlog conversion as the thing to watch; the report delivered it.
Investor Takeaway
Nubius management saying it could sell out 2027 capacity today but is holding some back is the single most bullish detail, since it implies demand exceeds even the aggressive buildout.
The Spending Is Still Enormous
None of this makes the capital intensity go away, and the bears will focus here. Capital expenditure hit $5.66 billion in the quarter, more than ten times the $510.6 million a year earlier and well above the roughly $4.7 billion analysts expected. To fund the buildout, non-current debt climbed to $8.50 billion from $4.10 billion at the end of last year, even as cash rose to $8.04 billion. This is a business consuming capital at a staggering rate, and the debt load is growing to match.
That is the tension the Nebius report does not resolve so much as reframe. As long as the contracts keep arriving and converting, the spending reads as disciplined investment in capacity that is already spoken for. But the model depends on demand staying ahead of the buildout, and any stumble, a pause in AI spending, a shift by big customers toward building their own infrastructure, would leave a heavily indebted company with expensive capacity and thinner demand. It is the same structural worry that hangs over the broader AI-data-center trade, where enormous backlogs sit atop heavy debt.
Why Michael Burry Is Still Short
The clearest expression of that bear case is a name. Michael Burry, the investor who famously bet against subprime mortgages before the 2008 crash, has disclosed a short position against Nebius, citing the company’s leverage and capital intensity. His thesis is precisely the risk above: that a company with 98% of its revenue in one white-hot category, funding a multibillion-dollar buildout with growing debt, is dangerously exposed if AI demand cools.
Wednesday’s 18% surge is the market siding, for now, with the other view. The report gave the bulls exactly what they wanted, contracted revenue, profitability, and demand that outstrips capacity, and the stock responded in kind. But Burry’s position is a reminder that the same facts support two readings. To the bulls, Nebius is a profitable, sold-out AI-cloud operator racing to meet insatiable demand. To the bears, it is a concentrated, leveraged bet on that demand never faltering.
The quarter strengthened the bull case materially; it did not eliminate the bear one. For how the range of outcomes maps to the share price, FinanceFeeds’ Nebius forecast frames a bull case at $220 and a bear case at $160, a spread the stock has now jumped clean through, and a separate analysis weighs the Nvidia stake from $410 bull to $120 bear.
The report also lands inside a broader AI-infrastructure trade that has swung violently between fear and greed all year, from the forced unwind of the Situational Awareness fund to sharp rebounds. Nebius just delivered the kind of quarter that powers the greed half of that cycle. Whether it holds depends on the same thing the whole trade depends on: that the demand for AI computing keeps running ahead of the enormous sums being spent to supply it.
Investor Takeaway
Having jumped through the $220 bull-case level in a single session, the Nebius stock now prices in much of the good news, so the risk-reward is less asymmetric than it was at the pre-earnings lows.