Throughout 2025, Nebius Group (NBIS +28.87%) focused on expanding its primary artificial intelligence (AI) cloud infrastructure business. This expansion drew investor attention when the company announced two significant agreements with hyperscalers, leading to the full utilization of its available data center capacity.
The stock tripled last year as the company exceeded bold revenue estimates. That guidance has continued to impress investors, and after Nebius reported Q1 results last month, the stock continued to plow higher. Shares soared 67.2% last month, according to data provided by S&P Global Market Intelligence. Investors now need to consider whether the stock has more room to run.
Image source: The Motley Fool.
Eye-popping numbers
Despite the company posting sales of only $105 million in the second quarter of 2025, management increased its prior guidance, forecasting an annual revenue run rate of up to $1.1 billion by the end of 2025. It ended up at a revenue run rate of $1.25 billion.
That incredible growth rate is only accelerating. Management now sees over $3 billion in revenue for 2026, ending the year at a rate that could see it more than double again in 2027. The global provider of AI cloud infrastructure is scaling capacity to justify those predictions. And first-quarter results show the demand is there.
Nebius' record pipeline more than quadrupled quarter over quarter in Q1. The company is actively preparing to support that demand.
It's all about compute capacity
The shift from AI training to the inference phase is spurring that demand. In the inference phase, a model utilizes the patterns and relationships acquired during training to evaluate new data and generate results.
This process might include activities like image classification, stock price prediction, speech recognition, or any other task the model is designed to perform. Inference is crucial because it enables the practical deployment of AI models, allowing them to provide insights or automate decisions in real-world scenarios.
As recently as last August, Nebius had contracts in place for over 1 gigawatt (GW) of power to support compute needs. That has now quadrupled, with the company saying last month that it expects to exceed 4 GW in contracted capacity by the end of 2026.
NASDAQ: NBIS
Key Data Points
As is the case with many fast-growing technology stocks, though, investors have bid up shares, anticipating a long runway of continued explosive growth. That doesn't mean it's too late to own Nebius shares. It just means that investor expectations should include the possibility that shares could correct in the short- or medium-term, and that it might take an extended period to realize market-beating returns going forward.
