Shares of Nebius Group closed sharply higher on Friday, gaining 9.2% to finish at $98.01. The rally followed the AI cloud company's announcement of a major expansion in Europe and a bold new financial target.
Strategic Expansion and Aggressive Targets
The company unveiled plans to construct a 240-megawatt data center in Béthune, northern France, on the site of a former tire factory. The first phase is slated to become operational by late summer 2026. Concurrently, Nebius raised its long-term financial ambition, projecting an annualized run-rate revenue between $7 billion and $9 billion by the end of 2026, a substantial increase from its current $1.25 billion run-rate.
Financial Performance: Growth Amid Heavy Investment
The company's fourth-quarter results highlighted both rapid growth and significant investment. Revenue soared to $227.7 million, up dramatically from $35.2 million a year earlier. However, this figure fell short of analyst expectations. Capital expenditures surged to approximately $2.1 billion for the quarter, driven by aggressive spending on AI chips and data center infrastructure.
On a profitability basis, Nebius reported an adjusted EBITDA profit of $15.0 million and generated $834.3 million in operating cash flow from continuing operations.
Market Context and Risks
The announcement arrives as investors closely scrutinize the massive capital requirements for building AI infrastructure. Nebius's strategy hinges on securing critical resources like power and semiconductors. The company noted it has over 2 gigawatts of contracted power capacity, with plans to exceed 3 gigawatts by late 2026. However, the ambitious timeline could be pressured by any slowdown in AI demand, delays in power connectivity, or tightening supply for key hardware and financing.
U.S. markets were closed Monday for the Presidents' Day holiday, providing analysts and investors additional time to assess the details before trading resumes on Tuesday. The company's next earnings report is scheduled for April 29.
