Nebius Group shares soared to an all-time high on Monday, closing at $264.51 ahead of Tuesday's regular trading session on the Nasdaq. The stock's surge was fueled by a combination of high-profile endorsements and significant institutional investment, underscoring the intense demand for artificial intelligence computing infrastructure.
Nvidia's Stamp of Approval
The rally gained momentum after Nvidia CEO Jensen Huang publicly praised Nebius during his Computex keynote speech. Huang listed Nebius among a select group of 'world-class AI clouds' and noted that the company is 'growing incredibly fast,' according to reports from The Motley Fool. This endorsement from one of the tech industry's most influential figures has significantly boosted investor confidence in Nebius's capabilities and market position.
Major Stake by AI Fund
Adding to the positive sentiment, a Schedule 13G filing with the U.S. Securities and Exchange Commission revealed that Situational Awareness LP, an AI-focused investment fund led by former OpenAI researcher Leopold Aschenbrenner, has acquired a 5.6% stake in Nebius, representing 12,410,060 Class A shares. The filing indicated that the shares were acquired for investment purposes and not to influence control of the company. Gil Luria, head of tech research at D.A. Davidson, told Reuters that Aschenbrenner's move signals his belief that 'most leverage right now in AI clouds is with specifically, Nebius.'
Strong Financial Performance and Ambitious Expansion
Nebius also released its first-quarter results, which showed a remarkable revenue surge to $399.0 million from $50.9 million in the same period last year. The company's AI cloud revenue alone reached $389.7 million, and its annualized run-rate revenue stood at $1.92 billion at the end of March. CEO Arkady Volozh emphasized that the company is experiencing 'several customers competing for every GPU,' and that higher spending reflects demand visibility extending into 2027, not just cost pressures. Nebius raised its 2026 capital expenditure guidance to a range of $20 billion to $25 billion, up from the previous $16 billion to $20 billion, signaling an aggressive expansion strategy.
Policy Support and Infrastructure Plans
The positive backdrop was further strengthened by policy developments. France announced that Nebius will invest over 8 billion euros to convert a former Bridgestone plant into a European computing hub with a target capacity of 240 megawatts. This project is part of broader AI and data center commitments unveiled at the Choose France summit, which also saw major investments from SoftBank, Brookfield, and Salesforce. The French government's support underscores the strategic importance of AI infrastructure in Europe.
Competitive Landscape and Risks
Nebius operates in the rapidly growing 'neocloud' segment, competing with firms like CoreWeave to rent AI computing power to big tech companies and developers. The company has already secured infrastructure deals with Meta Platforms and Microsoft. However, the path to profitability is not without challenges. Stone Fox Capital on Seeking Alpha highlighted the company's progress toward 4 GW of contracted power by year-end but flagged concerns about higher capex plans, noting that Nebius may need to raise additional capital, which could slow the rally. In the first quarter, Nebius spent approximately $2.5 billion on capex, primarily for GPUs, hardware, and data center construction. The company is funding these investments through operating cash flow, customer prepayments, debt, and an unused at-the-market equity plan. Any adverse shifts in power availability, chip supply, prepayment flows, or financing costs could put pressure on the stock's elevated valuation.
Outlook
For now, the market is rewarding Nebius's scale and speed in capturing the booming demand for AI compute. The key question remains whether the company can convert this growth into sustainable margins before rising financing costs begin to erode profitability. As the AI arms race intensifies, Nebius appears well-positioned to capitalize, but investors will be watching closely for signs of margin compression or funding needs.
