Nebius shares rocketed 28% to $247.05 on Wednesday following the cloud-computing company's strong quarterly results, according to Investing.com reports. The stock movement came after Nebius beat analyst expectations for revenue, driven by booming demand for AI infrastructure and larger contract values. The surge was amplified by ~24% short interest, which helped fuel the dramatic single-session move from $193 to $247. The stock traded between $216.11 and $235.96 after opening at $226, compared with its previous close of $193.23. The performance occurred alongside rival CoreWeave's 19% surge to $107.45, fueling a broader rally in AI infrastructure stocks as both companies signalled that demand for computing capacity continued to outpace supply.
Nebius reported $582.3 million in total sales for the June quarter, beating analyst estimates of $572.75 million, as reported by LSEG data. The company's core AI cloud business experienced a sixfold surge in revenue, with CEO Arkady Volozh telling Reuters that the company is turning rising demand into "contracted, profitable growth." The strong performance was driven by surging infrastructure demand, larger contracts, and higher prices across the AI cloud segment. The company's annualized run-rate hit $3 billion, representing a 598% year-over-year increase, while the company secured four deals averaging over $1 billion each, nearly quadrupling its total contract value. Contracts from new customers surged more than ninefold, highlighting the company's ability to attract and retain large-scale AI computing clients.
Nebius secured four deals averaging over $1 billion each, nearly quadrupling its total contract value, according to Reuters reports. Contracts from new customers surged more than ninefold, highlighting the company's ability to attract and retain large-scale AI computing clients. The company's focus on Nvidia-powered AI cloud solutions has positioned it well in the competitive AI infrastructure market, with CEO Volozh noting that demand for AI computing continues to far outstrip supply. Asked about growing competition from newcomers such as xAI, Volozh told Reuters that Nebius could sell its entire planned capacity for 2027 at current terms, demonstrating strong market demand. The company's managed inference ARR rose from ~$1M at launch to $100M+ in months, with management targeting $250M by year-end. A separate deal added momentum with the company agreeing to sell computing power to Reflection AI in an arrangement worth over $1 billion through 2029.
Nebius spent approximately $5.7 billion during the quarter, above analyst estimates of $4.7 billion, as reported by Reuters. The company continued heavy investment in GPUs and data-center expansion to meet growing demand. Nebius raised its contracted power target for 2026 to 5 gigawatts from more than 4 GW and plans to add over 1 GW of capacity annually from 2027—enough to power about 750,000 US homes. The company expects more than $9 billion in customer prepayments this year and has secured over $40 billion in customer commitments. AI cloud contracts signed during the period, with annual values exceeding $20 million per megawatt, were expected to come online late in the fourth quarter.
The strong performance comes as Nebius reported results alongside rival CoreWeave raising its annual forecasts, fueling a broader rally in AI infrastructure stocks. According to Emarketer analyst Jacob Bourne, demand for AI cloud capacity remains strong despite increasing competition from newcomers such as xAI. However, the key question remains whether that demand will prove diversified and sustainable beyond the AI industry. The July selloff, which saw U.S. chip stocks down 20% and Korea's Kospi down 22%—both worst monthly declines since 2008—had convinced many that neoclouds were overbuilt and overvalued. These earnings are forcing a rethink: the demand isn't hypothetical, it's contracted, prepaid, and accelerating. The bull case rests on demand outrunning supply, pricing accelerating, and Nvidia reportedly steering a ~$500 billion infrastructure funding initiative toward AI cloud specialists.
