Nebius Stock Soars Following Arete Securities’ Aggressive Price Target Boost

• Nebius Group (NBIS) shares surged 20% to $47.19, driven by Arete Securities’ Buy rating and $84 price target, reflecting strong confidence in its AI infrastructure growth potential.
• The company’s 400% year-over-year revenue growth, $1.4 billion cash reserve, and partnerships with Nvidia (NVDA) and Metalamma bolster its position in the expanding AI cloud market.
• Despite increased 2025 capital expenditure of $2 billion and expected unprofitability until the second half of 2025, Nebius targets 20-30% medium-term EBITDA margins.

Nebius Group (NBIS) has captured significant market attention, with its shares surging 20% to $47.19 in early trading on Thursday, driven by robust investor confidence in its AI infrastructure prospects. Arete Securities initiated coverage with a ‘Buy’ rating and a price target of $84, led by analyst Andrew Beale, who highlighted the company’s strong growth potential in the rapidly expanding AI compute services market. This target suggests substantial upside, reflecting Nebius’s strategic positioning in a sector fueled by increasing demand for artificial intelligence capabilities.

The company’s financial performance underpins this optimism, with a remarkable 400% year-over-year revenue growth and a 700% increase in annualized run-rate revenue, showcasing its ability to scale operations amid booming demand for AI cloud platforms. Nebius’s $1.4 billion cash reserve provides a solid foundation for sustained investment, particularly as the company ramps up its 2025 capital expenditure to $2 billion to support infrastructure expansion. This includes the addition of three new global locations to enhance service capacity, positioning Nebius to meet growing market needs. Strategic partnerships with industry leaders Nvidia (NVDA) and Metalamma further strengthen its technological edge, while its ranking in the golden tier of the GPU cloud cluster marks rating system underscores its industry credibility.

Despite these strengths, Nebius faces challenges, including projected unprofitability on an adjusted EBITDA basis for 2025, with profitability not expected until the second half of the year. The company’s medium-term EBITDA margin target of 20-30% indicates a path toward financial stability, but its reliance on partnerships and external funding for growth introduces risks. Arete’s bullish outlook, however, emphasizes Nebius’s ability to capitalize on the AI infrastructure boom, leveraging its technological capabilities and strategic alliances to drive long-term value. The company’s focus on GPU-intensive cloud solutions aligns with broader industry trends, where AI-driven workloads are reshaping data center demands, positioning Nebius as a key player in this transformative market.

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