Key Highlights
- Bank of America launched coverage on Nebius (NBIS) with a Buy rating and $150 price target, suggesting 31% potential upside
- Shares of NBIS rose approximately 2% in premarket trading Tuesday after the analyst initiation
- BofA analysts described Nebius as an “emerging leader in global AI compute,” emphasizing its GPU-focused data center strategy
- Meta Platforms secured a deal worth up to $27B over five years for Nebius AI services; Nvidia contributed a $2B investment
- Company revenue jumped 351% year-over-year to reach $529.8M, achieving a 68.6% gross margin
Nebius (NBIS) shares moved approximately 2% higher in premarket action on Tuesday following Bank of America’s initiation of coverage with a Buy recommendation and a $150 price objective.
BofA analyst Tal Liani, along with his research team, characterized Nebius as a rising force in the global AI compute landscape. The analysts highlighted the company’s strategic positioning within the AI Infrastructure-as-a-Service sector as a primary driver behind their positive outlook.
Nebius constructs and operates large-scale data centers, enabling businesses to train and deploy AI models without constructing their own infrastructure. BofA characterized the platform as purpose-engineered for GPU-intensive distributed computing workloads.
The research team forecasted that the entire IaaS market, incorporating AI IaaS, will exceed $419 billion by 2028. They attributed this expansion to increasing model sophistication and accelerated enterprise AI adoption.
The equity has climbed 291% during the past year. Based on current trading levels, the $150 price objective represents approximately 31% additional upside potential, although InvestingPro analysis indicated the stock might be overvalued compared to its fair value calculation. Shares were trading around $114 before Tuesday’s opening bell.
Major Partnerships with Meta and Nvidia Strengthen Position
Earlier in the month, Meta Platforms agreed to allocate up to $27 billion across five years to utilize AI infrastructure services from Nebius. The arrangement began at $12 billion, with options for an additional $15 billion expansion.
Nvidia separately disclosed a $2 billion equity investment in the Netherlands-based enterprise, providing additional validation for its infrastructure approach.
These strategic partnerships triggered a wave of analyst price target increases. BWS Financial elevated its price objective to $200 from $130. DA Davidson similarly adjusted its target to $200 from $150 following the Meta agreement announcement. Compass Point maintained its Buy stance with a $150 price target.
Microsoft also appears on Nebius’s client roster, alongside Meta.
Strong Financial Performance Supports Growth Narrative
Nebius disclosed revenue of $529.8 million during the trailing twelve months, representing a 351% increase year-over-year. The company achieved a gross margin of 68.6%.
The organization also priced a $4 billion convertible senior notes offering, expanded from an initial $3.75 billion proposal. The transaction comprised $2.25 billion in 1.250% notes maturing in 2031 and $1.75 billion in 2.625% notes maturing in 2033, marketed to qualified institutional investors with an anticipated settlement date in March 2026.
Bank of America simultaneously renewed coverage of CoreWeave (CRWV), a competitor in the AI infrastructure arena, with a Buy rating and a $100 price target on Tuesday.
Nebius maintains Microsoft and Meta as its primary customers and continues expanding its data center infrastructure to satisfy growing demand for AI computational capacity.
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