Key Highlights
- Bank of America launched coverage of Nebius (NBIS) with a Buy rating alongside a $150 price target, suggesting 31% potential upside
- The stock advanced approximately 2% during premarket hours on Tuesday after the coverage announcement
- Analysts at BofA described Nebius as an “emerging leader in global AI compute,” emphasizing its GPU-dense data center approach
- Meta Platforms agreed to allocate up to $27B across five years for AI infrastructure from Nebius; Nvidia contributed $2B in investment
- Company revenue jumped 351% year-over-year, reaching $529.8M, while maintaining a 68.6% gross margin
Nebius (NBIS) saw its shares rise approximately 2% during premarket trading on Tuesday following Bank of America’s launch of coverage with a Buy recommendation and a $150 price objective.
BofA analyst Tal Liani, along with his research team, characterized Nebius as an emerging leader within the global AI compute sector. The firm highlighted the company’s strategic positioning in the AI Infrastructure-as-a-Service marketplace as a primary driver behind their positive outlook.
Nebius develops and operates expansive data centers, enabling enterprises to train and deploy AI models while avoiding the need to construct their own infrastructure. BofA characterized the platform as purpose-built for GPU-dense distributed computing workloads.
The research team forecasts that the overall IaaS market, encompassing AI IaaS, will exceed $419 billion by 2028. They attributed this expansion to increasing model sophistication and accelerated enterprise adoption of artificial intelligence technologies.
The shares have surged 291% during the past twelve months. Based on current trading levels, the $150 price objective represents approximately 31% additional upside potential, although InvestingPro analysis indicated the stock may be trading above its estimated fair value. Shares were changing hands near $114 before Tuesday’s trading session.
Major Contracts with Meta and Nvidia Strengthen Position
Earlier in the month, Meta Platforms committed to deploying up to $27 billion across a five-year period to secure AI infrastructure access from Nebius. The agreement began at $12 billion, with the possibility of an additional $15 billion investment.
Nvidia separately disclosed a $2 billion stake in the Netherlands-based company, providing additional validation for its infrastructure approach.
These partnerships triggered a series of analyst target price increases. BWS Financial elevated its price objective to $200, up from $130. DA Davidson similarly adjusted its target to $200 from $150 following the Meta agreement announcement. Compass Point maintained its Buy recommendation with a $150 objective.
Microsoft also appears among Nebius’s client roster, joining Meta as a major customer.
Strong Financial Performance Supports Growth Narrative
Nebius posted revenue of $529.8 million across the trailing twelve months, representing a 351% increase year-over-year. The company achieved a gross margin of 68.6%.
The firm also completed pricing for a $4 billion convertible senior notes offering, increased from an initial $3.75 billion plan. The financing package comprised $2.25 billion in 1.250% notes maturing in 2031 and $1.75 billion in 2.625% notes due in 2033, marketed to qualified institutional buyers with anticipated settlement in March 2026.
Bank of America simultaneously reinstated coverage of CoreWeave (CRWV), a competing player in the AI infrastructure arena, with a Buy rating and a $100 price target on Tuesday.
Nebius maintains Microsoft and Meta among its premier customers while continuing to expand its data center infrastructure to satisfy growing demand for AI computational resources.
