TLDR
- BofA initiated Nebius (NBIS) with a Buy rating and a $150 price target, implying 31% upside
- NBIS climbed roughly 2% premarket on Tuesday following the initiation
- BofA called Nebius an “emerging leader in global AI compute,” highlighting its GPU-dense data center model
- Meta committed up to $27B over five years for Nebius AI infrastructure; Nvidia invested $2B
- Nebius revenue surged 351% year-over-year to $529.8M, with a 68.6% gross margin
Nebius (NBIS) posted a premarket gain of around 2% on Tuesday after Bank of America kicked off coverage with a Buy rating and a $150 price target.
Analyst Tal Liani and his team at BofA called Nebius an emerging leader in global AI compute. They pointed to the company’s position in the AI Infrastructure-as-a-Service market as a key reason for their optimism.
Nebius builds and runs large data centers, giving companies the ability to train and run AI models without building their own infrastructure. BofA described it as a purpose-built platform designed for GPU-dense distributed workloads.
The analysts projected that the total IaaS market, including AI IaaS, will surpass $419 billion by 2028. They said growing model complexity and faster enterprise adoption of AI are driving that growth.
The stock has gained 291% over the past year. At current levels, the $150 target implies roughly 31% further upside, though InvestingPro data flagged the stock as potentially overvalued relative to its fair value estimate. The stock was trading near $114 ahead of Tuesday’s session.
Meta and Nvidia Deals Add Weight
Earlier this month, Meta Platforms committed to spending up to $27 billion over five years to access AI infrastructure from Nebius. That contract started at $12 billion, with the potential for an additional $15 billion.
Nvidia also announced a $2 billion investment in the Dutch company, adding further credibility to its infrastructure model.
Those deals prompted a round of price target upgrades. BWS Financial raised its target to $200, up from $130. DA Davidson also moved to $200 from $150 after the Meta contract was announced. Compass Point kept its Buy rating with a $150 target.
Microsoft is also listed among Nebius’s customer base, alongside Meta.
Financials Back the Story
Nebius reported revenue of $529.8 million over the last twelve months, a 351% jump year-over-year. Gross margin came in at 68.6%.
The company also priced a $4 billion convertible senior notes offering, upsized from an earlier $3.75 billion plan. The deal included $2.25 billion in 1.250% notes due 2031 and $1.75 billion in 2.625% notes due 2033, sold to qualified institutional buyers and expected to settle in March 2026.
BofA also reinstated coverage of CoreWeave (CRWV), a rival in the AI infrastructure space, with a Buy rating and a $100 price target on Tuesday.
Nebius counts Microsoft and Meta among its largest customers and continues to expand its data center footprint to meet demand for AI compute.
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