Nebius Surges 20% on Strong AI Infrastructure Demand and Billion-Dollar Contracts

Nebius, an AI cloud company led by Arkady Volozh, co-founder of Yandex, reported second-quarter revenue of $582.3 million, surpassing the LSEG consensus forecast of $572.75 million. The revenue growth was driven by a nearly sixfold increase in its core AI cloud unit, as the company capitalized on market demand by signing four major contracts each worth over $1 billion. This led to a fourfold increase in total contract value and a ninefold rise in volume of deals with new customers. Volozh attributed the success to a fundamental market imbalance where demand for computing resources continues to outpace supply, and he expressed confidence in selling all planned capacity for 2027 even amid competition from xAI and other new players. The company has significantly ramped up capital expenditure to about $5.7 billion, exceeding Visible Alpha's expectations of $4.7 billion, for GPU purchases and data center construction. Nebius raised its contracted capacity target for 2026 to 5 GW and plans to add over 1 GW annually from 2027. By the end of the year, Nebius expects to receive over $9 billion in prepayments from customers, with total customer obligations exceeding $40 billion.