Nebius (NBIS) Surges 18% on Q2 Beat as Backlog Answers Capex Fear

Nebius Group reported second-quarter results before Wednesday's open. The stock surged about 18% to around $233.

The report beat estimates. It also answered the question that had driven a 16% pre-earnings pullback: whether the company's spending on AI data centers was outrunning its ability to fill them with paying customers.

Revenue came in at $582.3 million, up 454% from $105.1 million a year earlier and ahead of the $572.75 million analysts expected. The GAAP net loss of $0.68 a share beat the roughly $0.86 loss analysts had forecast. Stripped of one-time items, the adjusted net loss narrowed to $33.2 million, or about $0.12 a share, from $91.5 million a year earlier.

Adjusted EBITDA hit $236.2 million, swinging from a $21 million loss in the same quarter last year. The core AI-cloud business, which now accounts for about 98% of total revenue, posted an adjusted EBITDA margin of 49.7%. AI-cloud revenue reached $574.9 million, up 514% year over year.

During the quarter Nebius closed four AI-cloud contracts each worth more than $1 billion. Total contract value nearly quadrupled from the prior quarter. Annualized run-rate revenue reached $3 billion, up from $1.9 billion at the end of March.

CEO Arkady Volozh framed the backlog as converting demand into "contracted, profitable growth." Management said the company could sell out all of its planned 2027 capacity at current terms but was holding some back to capture future demand at potentially better prices.

Capital expenditure hit $5.66 billion, more than ten times the $510.6 million a year earlier and above the roughly $4.7 billion analysts expected. Non-current debt climbed to $8.50 billion from $4.10 billion at the end of last year, even as cash rose to $8.04 billion.

That capital intensity is the bear case. Michael Burry has disclosed a short position against Nebius, citing leverage and the concentrated bet on AI demand. The same facts support two readings. To the bulls, Nebius is a profitable, sold-out AI-cloud operator racing to meet insatiable demand. To the bears, it is a leveraged bet on that demand never faltering.

NBIS holds an Alpha Score of 53 out of 100, rated Mixed, in the Communication Services sector. The stock's surge pushed it above the pre-earnings range of $160-$220 that several traders had outlined. They said the quarter strengthened the bull case but did not eliminate the downside risk from a slowdown in AI spending.

The next quarterly report is expected in October. Until then, the debate between the bulls and the bears will rest on the same question: whether demand for AI computing keeps running ahead of the enormous sums being spent to supply it.