Nebius Group (NBIS) Earnings Tuesday: Can AI Profits Outweigh Mounting Losses?
Nebius Group (NBIS) faces a make-or-break moment as it prepares to unveil its quarterly results this Tuesday. The burning question: Will its AI division deliver enough firepower to offset deep red ink elsewhere?
Wall Street's watching—and skeptics are already sharpening their knives.
Here's the breakdown:
The AI Gambit: Nebius bet big on artificial intelligence last year, promising 'transformational synergies.' Now we'll see if those buzzwords translate to actual revenue.
Loss Leader: Despite AI hype, the company's core segments continue bleeding cash. Tuesday's report will reveal whether management's 'strategic patience' looks visionary or delusional.
Market Reaction: Traders have priced in modest AI gains—anything short of spectacular will trigger sell orders. As one hedge fund manager quipped: 'Another 'future growth' story? I'll believe it when I see it in the EPS.'
One thing's certain: In today's market, even AI can't automate away bad fundamentals.
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Shift to AI Services Powers Growth, Though Losses Persist
In recent quarters, Nebius Group (NBIS) has shifted sharply toward AI cloud services. It now generates revenue by renting GPU power and offering cloud-based tools. This MOVE has helped drive significant growth. In the second quarter, the company reported $105.1 million in revenue, up 625% year-over-year, and posted a profit in its core AI cloud unit.
However, the company still expects to close the full year with a loss. Net income for 2024 came in at negative $641.4 million, and free cash flow was also negative. Wall Street expects an EPS of -$0.56 for the third quarter. For the full year 2025, the consensus estimate sits NEAR minus $1.63 per share.
To fund its scale-up, Nebius Group raised over $4.2 billion through recent stock and bond offerings. The capital is earmarked for expanding its data center footprint and bringing more GPU chips online. The company aims to reach 220 megawatts of power capacity by year-end and over 1 gigawatt by the end of 2026. These upgrades are key to fulfilling large AI infrastructure deals with clients like Microsoft (MSFT), Cloudflare (NET), and Shopify (SHOP).
Looking ahead, Nebius Group has raised its annualized revenue run-rate target to a range of $900 million to $1.1 billion. It also stated it could reach group-level profitability by year-end, though that will likely depend on new GPU supply and data center rollout timelines.
Tuesday’s report will be closely watched for updates on revenue guidance, hardware capacity, and margin progress. Investors will also look for commentary on tariffs and capital spending plans. A clearer path to profit could help support the recent rally in the stock.
Is Nebius Stock a Buy?
Wall Street analysts currently rate the stock a Strong Buy, with an average NBIS stock price target of $155.75. This represents a potential 39.96% upside from the current price.
