When investing in artificial intelligence (AI) stocks, individuals tend to focus on the big, megacap stocks making waves, but the next wave of AI may more comfortably benefit smaller infrastructure companies. As capital moves from model development to deployment, people are demanding more cloud capacity, superior computing power and AI-ready data centers, making demand hot.
One notable name that has quietly caught Wall Street’s attention is Nebius (NBIS). Wedbush analyst Dan Ives just listed NBIS as his top AI infrastructure pick for 2026, arguing that the company’s positioning and technology make it a likely acquisition target for a hyperscaler like Microsoft ( MSFT ), Alphabet ( GOOG ) ( GOOGL ), or Amazon ( AMZN ).
For investors looking beyond the obvious AI frontrunners, here’s a closer look at why NBIS is drawing bullish attention heading into 2026.
Headquartered in Amsterdam, Nebius provides GPU-accelerated and full cloud AI infrastructure in Europe and North America. It builds sustainable data centers and leases AI-optimized compute clusters with liquid cooling and high-powered GPUs to hyperscalers and enterprises. The company emerged from a restructuring of the former Yandex infrastructure business and now combines its core AI cloud service with subsidiaries in autonomous vehicles and education technology.
Valued at about $23 billion by market cap, NBIS stock has been excellent this year. After slowing after the restructuring, the stock rallied over the summer, in part when Nvidia ( NVDA ) disclosed a stake in the company, reaching a peak of more than $140 by October. A surge in new deals with tech giants such as Microsoft and Meta ( META ) further fueled investor excitement. So far, Nebius has gained about 225% year-to-date (YTD), despite a pullback from its recent high.
That performance comes with clear trade-offs. Nebius is now trading at valuation levels that leave little room for error. Its trailing price-to-sales multiple is in the mid-50s, well above the sector median, which trades closer to 4x, and its own 5-year historical average, which sits at 24x.
In short, the market values Nebius as a future cornerstone of AI infrastructure. This may prove correct, but it also means that any slowdown in contract growth, pricing pressure, or mis-spending of capital could hurt the stock heavily. At today’s levels, execution matters as much as vision.
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Support from Dan Ives, who called Nebius “ripe” for a 2026 acquisition by a hyperscaler, gave the stock a short-term boost. On the day his comments were made public, NBIS rose about 14% on the news. Investors interpreted it as a validation of Nebius’ strategic value. Ives specifically noted that among “neocloud” AI firms, Nebius is the most likely buyout candidate, which fueled the positive sentiment.
For the company, this means fresh investor interest and higher trading volume, although it is too early to tell if any deals are imminent. In the short term, the news underscores the stature of Nebius’ industry; if true, a 2026 deal could be transformative. But even in the absence of an actual acquisition, the hype helps highlight Nebius’ core business and contracts, potentially improving access to capital.
Nebius delivered a strong quarter in Q3 2025, posting revenue of $146.1 million, up 355% year-over-year (YoY), as demand for AI infrastructure increased and new large contracts emerged. This growth was largely driven by strong uptake in its core AI infrastructure business, which now accounts for the vast majority of results.
Profitability, however, remains a work in progress. Nebius reported a GAAP net loss of $119.6 million, higher than a year earlier, reflecting aggressive expansion and rising depreciation related to new data center capacity. But beneath the surface was a bright spot. The adjusted EBITDA loss narrowed sharply to $5.2 million, a significant improvement from nearly $46 million last year, as higher revenues began to offset operating expenses.
On the other hand, expenses rose sharply as the company accelerated its development. Operating cash consumption rose to $80.6 million, while capital spending rose to nearly $1.0 billion in the quarter, underscoring how capital-intensive AI infrastructure has become. Even so, Nebius ended the period with a formidable cash balance of $4.8 billion, bolstered by recent equity and debt raises, giving it plenty of firepower to execute on its growth plans.
Looking ahead, management remains bullish. Nebius is targeting an annual revenue run rate of $750 million to $1 billion by the end of 2025 and plans to increase connected power capacity to 800 to 1,000 megawatts by 2026, with even more capacity already under contract.
CEO Arkady Volozh said the company has effectively sold its existing capacity, with future capacity already pre-committed. While losses are expected to persist in the short term, the strategy is clear: scale first, optimize later.
As the quarter closed, Nebius continued to make headlines. On December 17, it released Nebius AI Cloud 3.1 with Nvidia’s new ultra-powerful Blackwell GPUs. The company said it is now “the first working cloud in Europe“ these latest Nvidia GB300 and HGX B300 systems in production, a technical milestone for customers.
Nebius also highlighted its $3 billion AI infrastructure deal with Meta (announced in September) as a boost to outstanding revenue. These announcements were viewed positively as further evidence of Nebius’ scale and partnerships.
Wall Street remains broadly positive on NBIS stock, although analysts are clear about the risks. Goldman Sachs reiterated a “Buy” rating in November 2025 and raised its 12-month price target to $155, citing accelerating demand for AI infrastructure and improved visibility into large-scale contracts.
Similarly, DA Davidson also maintained a “Buy” with a target of $150, while CICC initiated coverage at $143, indicating Nebius’ growing role in the global development of AI computing.
Taken together, the average analyst rating is Moderate Buy, and the broader consensus is around $150, implying an upside potential of around 70%, which shows analysts’ confidence in Nebius’ growth trajectory rather than near-term profitability.
However, this optimism comes with caveats. Analysts consistently highlight Nebius’ rapid revenue growth and ability to secure deals with large enterprises, but many also flag the valuation as demanding. The investment case assumes smooth execution, disciplined capital expenditure and sustained customer demand. Any stumbles could weigh heavily on NBIS stock.
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At the time of publication, Nauman Khan did not hold (either directly or indirectly) any position in any of the securities mentioned in this article. All information and data in this article is for informational purposes only. This article was originally published on Barchart.com
