Nvidia invests $2 billion in Nebius as AI stock soars 400% in a year

Nvidia’s $2 billion strategic equity investment in Amsterdam‑based Nebius Group helped the AI cloud firm’s shares climb more than 400% over the past 12 months, pushing its market value to roughly $55 billion [1].

Nebius reported first‑quarter revenue of $399 million, a 684% year‑over‑year jump, with its core AI cloud segment delivering $390 million and an annualized run‑rate of $1.92 billion by March’s end [1]. Adjusted EBITDA swung to a $130 million profit, up from a $54 million loss a year earlier, while the AI cloud margin nearly doubled to 45% [1]. The company’s growth is underpinned by massive contracts: a $12 billion fixed compute commitment plus a $15 billion flexible option with Meta, and a $17.4 billion (potentially $19.4 billion) deal with Microsoft [1].

The Nvidia stake signals confidence in Nebius’ role in the expanding AI infrastructure ecosystem, where chipmakers and cloud providers are racing to meet billions in projected spending. However, Nebius’ valuation now reflects lofty expectations. At the midpoint of its 2026 revenue guidance ($3 billion to $3.4 billion), the stock trades at about 17 times forward sales, assuming the company meets its ambitious targets [1]. Capital spending is slated to rise to $20‑$25 billion in 2026, outpacing current cash flow and requiring debt or equity raises that could dilute shareholders [1].

Nebius’ reliance on a few hyperscalers also raises concentration risk. The Meta agreement, while transformational, ties a sizable portion of future revenue to a single customer and a build‑out that won’t deliver capacity until early 2027 [1].

With Nvidia’s backing and the company’s explosive growth, the market has priced in a near‑perfect execution narrative. The real test will be whether Nebius can sustain its expansion without over‑leveraging and how quickly investors re‑evaluate the stock if the projected spending pace slows.