AI’s Best-Kept Secret Stock 🤫

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AI’S BEST KEPT SECRET STOCK 🤫

Remember when $NBIS ( ▲ 1.68% ) was the “who?” in AI infrastructure? Yeah, not anymore. They just went from small-time cloud upstart to $MSFT ( ▲ 0.31% ) ’s $19.4 billion partner in crime.

And to top it off, they raised $4.2 billion in cheap money to fuel their expansion. At coupons of just 1% and 2.75%. Compare that with $CRWV ( ▼ 2.33% ) paying nearly 9%, and you see why Nebius is strutting like it just stole Nvidia’s lunch table. That rate difference alone saves them ~$200 million a year in interest.

So what’s the bull case? ARR compounding like crazy, clusters running hot at near-full utilization, and capacity that’s sprinting toward gigawatt-scale by 2026.

Let’s break it down.

The Microsoft Megadeal

Nebius landed a $17.4 billion hyperscale contract with Microsoft, extendable to $19.4 billion through 2031.

That deal does two huge things:

1. Locks in revenue visibility for the next six years.

2. Turns Nebius into a “real” hyperscaler in Wall Street’s eyes.

And because Microsoft is now anchoring Nebius’ 300 MW New Jersey campus, Nebius gets to skip the awkward small-talk phase with other customers. If Microsoft trusts them, everyone else feels safe writing checks.

The $4.2B War Chest

Just one week after the Microsoft deal, Nebius raised $4.2B. But here’s the kicker:

• The debt was priced at 1–2.75% coupons.

• That’s way cheaper than CoreWeave’s 9% notes.

• Liquidity now sits at ~$5B, vs. ~$2B annual CapEx needs.

So what does that mean? They’ve got enough cash to build data centers without begging the market for dilutive equity. And Microsoft gets reassurance that Nebius can actually deliver.

Growth Metrics That Look Like a Meme Stock

Q2 2025 numbers were bananas:

• Revenue: $105.1M (+625% YoY)

• ARR: $439M (+438% YoY)

• Guidance: $900M–$1.1B ARR by year-end

Clusters are basically sold out. Every megawatt they turn on is instantly spoken for. Management says utilization is near peak.

By YE 2025, Nebius expects 220 MW connected power. By YE 2026, they’re shooting for >1 GW.

This is the classic flywheel in action:

Cheaper capital → more capacity → more demand → higher ARR → even more capacity.

It’s beautiful. 🥹 

The Market They’re Chasing

Here’s why all this matters:

• Global data center capacity demand will 3.5x from 82 GW in 2025 → 219 GW in 2030.

• AI workloads = almost all of that incremental demand.

• The market will need to add 13–31 GW of AI capacity every year.

And Nebius is one of the few players building AI-native infrastructure from scratch. We’re talking bare-metal servers, liquid cooling, optimized rack density. Not legacy cloud retrofits.

That design choice means they’re perfectly positioned to ride Nvidia’s GPU wave while hyperscalers scramble to outsource excess demand.

The Bear Case

Okay, not everything is rainbows and GPUs. Bears are circling:

• Valuation: Nebius trades at ~39x forward sales. Sector median? Closer to 3x.

• Execution risk: They must deliver 100 MW in Vineland, NJ by end of 2025 for Microsoft. Any slip, and this thing re-rates fast.

• Competition: CoreWeave has 1.3 GW (after buying Core Scientific) vs. Nebius’ projected 220 MW YE 2025.

In short: Nebius has less room for error than a Jenga tower during an earthquake.

But here’s the thing. Q2 revenues grew 600%+ YoY, demand is eating every watt they can supply, and adjusted EBITDA is already positive. So yeah, valuation looks crazy… unless they keep compounding at triple digits.

Takeaway

Nebius just went from scrappy challenger to financed hyperscale contender. And it’s all thanks to Microsoft’s validation + $4.2B cheap debt.

Yes, the multiples are eye-watering. Yes, execution risk is real. But in a market where AI data center demand will triple+ by 2030, being early with AI-native infrastructure matters more than looking cheap on a spreadsheet.

The average price target on wall street is $127. That leaves a 28% upside if the stock performs about as well as expected.

This is the kind of story where bulls see a trillion-dollar cycle, and bears see a bubble.

TL;DR

• Nebius landed a $17.4B–$19.4B Microsoft contract through 2031.

• Raised $4.2B at just 1–2.75% coupons → ~$200M annual interest savings.

• Q2 revenue: $105.1M (+625% YoY). ARR: $439M (+438% YoY).

• Targeting 220 MW by YE 2025 and >1 GW by 2026.

• Global AI data center demand set to 3.5x by 2030.

• Risks: 39x forward sales multiple, execution pressure at NJ campus, and competition from CoreWeave.

• But if Nebius keeps compounding, the “bubble” may just be the new baseline.