TLDR
- Vineland’s Planning Board approved Phase 2 of Nebius’ New Jersey data center, adding 600,000 sq ft to the project.
- The approval clears a key hurdle for Nebius’ $17.4 billion, five-year Microsoft cloud deal.
- NBIS dipped 2% in premarket trading Tuesday, opening at $277.58.
- Q2 revenue hit $582.3 million, up 454% year over year, beating estimates by a wide margin.
- Bank of America has a Buy rating on NBIS with a $310 price target.
Nebius Group (NBIS) slipped 2% in premarket trading Tuesday, opening near $277.58, even as a key regulatory hurdle for its most important cloud contract was cleared.
The Vineland, New Jersey Planning Board voted Monday night to approve Phase 2 of the AI data center under construction in the South Jersey town. Phase 2 adds 600,000 square feet to the project, which was originally approved as a roughly 300-megawatt facility. Phase 1 is already under construction.
The data center is being developed by DataOne as a major AI infrastructure campus. The project had stalled after DataOne proposed a larger build-out that could reach 350 MW. Public pushback over noise, water use, emissions, and LNG storage held up the board’s vote.
That approval matters because the Vineland site is expected to provide the capacity underpinning Nebius’ $17.4 billion deal with Microsoft. The two companies agreed on a five-year contract last year, making the New Jersey campus a central piece of Nebius‘ U.S. expansion plan.
Without the approval, Nebius risked delays in bringing capacity online for Microsoft on schedule. That risk is now off the table.
The premarket dip came alongside broader market pressure tied to renewed attacks in the Strait of Hormuz, rather than any Nebius-specific news. Despite the drop, NBIS remained one of the top trending stocks on Stocktwits Tuesday morning.
Strong Earnings Backdrop
The Vineland news comes days after Nebius reported blowout Q2 results. The company posted revenue of $582.3 million, up 454% year over year, and beat the consensus EPS estimate of -$0.67 by posting just -$0.12. Its AI Cloud segment alone grew 514%.
Annualized revenue run rate is approaching $3 billion. Adjusted EBITDA reached $236 million for the quarter. Four AI infrastructure contracts now reportedly exceed $1 billion in total value, and the backlog stands at more than $40 billion.
Those numbers sent NBIS up 34% the day earnings dropped.
Following the results, Citigroup raised its price target to $324, Robert W. Baird went to $340 with an outperform rating, and Bank of America lifted its target to $310, also maintaining a Buy.
Analyst and Institutional Outlook
Bank of America analysts noted that both Nebius and CoreWeave (CRWV) are benefiting from “increasingly favorable pricing dynamics,” with demand from hyperscalers and AI labs continuing to exceed available GPU supply.
BofA said pricing for next-generation GPUs is moving higher, while older-generation GPU pricing has stayed resilient. The analysts suggested these trends could push operating margins up by 500 to 1,000 basis points.
Nebius plans to deploy more than 1 gigawatt of capacity per year starting in 2027 and has a contracted power target of 5 gigawatts.
Alberta Investment Management Corp. disclosed a new stake of 55,800 NBIS stock units, valued at roughly $15.4 million, purchased during Q2. Institutional investors and hedge funds now own 21.9% of the stock.
Not everyone is bullish. Morgan Stanley holds an equal-weight rating with a $144 price target. DA Davidson rates the stock neutral with a $175 target. Michael Burry has reportedly taken a short position.
Piper Sandler initiated coverage on August 3 with a neutral rating and a $224 target.
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