Can Nebius Reach $7-$9B Annualized Run-Rate Revenue in 2026?

Nebius Group N.V. NBIS has outlined an ambitious yet clearly defined financial trajectory, targeting an annualized run rate (ARR) revenue of between $7 billion and $9 billion by the end of 2026. The company reiterated its confidence in achieving this milestone, emphasizing that visibility into demand trends, operational scaling and ongoing strategic execution.  For 2026, the company expects revenue to be between $3 billion and $3.4 billion.

In 2025, the company exceeded the high end of its ARR guidance of $900 million to $1.1 billion, reaching more than $1.2 billion in ARR. Nebius is witnessing strong demand from large accounts, hyperscalers, AI-native start-ups and enterprise customers. AI-focused clients are rapidly scaling GPU usage from hundreds or thousands to tens of thousands, while enterprises are expanding AI across core operations, resulting in larger and longer-term contracts. New customer contract durations have risen 50%, and the overall pipeline continues to expand. Additionally, pipeline growth remains strong, with creation expected to exceed $4 billion in the first quarter of 2026.

Additionally, Nebius delivered the first tranche of its Microsoft commitment on schedule in November, with the remaining tranches set for deployment throughout 2026, mostly in the second half. Nebius anticipates Microsoft will contribute revenue at its full annual run rate beginning in 2027, following the deployment of all tranches.

Nebius’ growth is being driven by the expansion of its AI cloud platform through both organic development and acquisitions, including the launch of Token Factory and Aether, as well as the acquisition of Tavily, which strengthens platform capabilities and developer engagement. The company also maintains multiple financing avenues, such as operating cash flow, debt and asset-backed financing, potential equity issuance and stakes in non-core assets like ClickHouse and Avride.

The company has accelerated its capacity expansion plans, announcing nine new data centers and securing more than 2 gigawatts of contracted power, with expectations to surpass 3 gigawatts. Nebius remains on track to deliver 800 megawatts to 1 gigawatt of available data center capacity by the end of 2026.

With the AI cloud market expanding rapidly, Nebius faces intense competition from hyperscalers and specialized AI infrastructure providers that are aggressively expanding capacity and pricing strategies to capture greater market share, making disciplined execution, differentiated platform capabilities and scalable infrastructure critical to sustaining its long-term growth ambitions.

Competitors’ Key Initiatives to Accelerate Revenue

CoreWeave, Inc.’s CRWV revenue growth is fueled by its strong positioning in the generative AI boom, expanding capacity and enhancing services to support training and inference workloads despite supply constraints. The launch of CoreWeave ARENA, designed to replicate real-world AI performance, is delivering faster speeds and lower costs for customers. Multi-billion-dollar contracts with OpenAI and Meta provide long-term revenue visibility. NVIDIA’s $2 billion investment and planned deployment of Rubin technology further strengthen its AI cloud capabilities. The company is also scaling data center capacity across the United States and Europe while pursuing acquisitions like Monolith AI to expand platform capabilities and drive innovation-led growth.

However, delays in powered-shell deliveries are expected to weigh on fourth-quarter results, leading management to lower its 2025 guidance. The company projects revenue of $5.05–$5.15 billion (down from $5.15–$5.35 billion) and adjusted operating income of $690–$720 million, reduced from the earlier $800–$830 million forecast. CoreWeave is scheduled to report fourth-quarter 2025 results on Feb. 26, 2026.

Microsoft Corporation’s MSFT business model spans cloud infrastructure, productivity software, gaming, professional networking and advertising, creating exceptional revenue diversification that insulates performance from sector-specific downturns. The subscription-based model across Office 365, Azure and Dynamics generates highly predictable recurring revenue with strong renewal rates exceeding industry averages.  Microsoft is gaining from robust cloud and AI business momentum alongside Copilot adoption. The company's $625 billion remaining performance obligations and 15 million Microsoft 365 Copilot paid seats demonstrate robust enterprise demand and successful AI product adoption. For the third quarter of fiscal 2026, the company expects total company revenues between $80.65 billion and $81.75 billion, suggesting growth of 15% to 17%.

NBIS Price Performance, Valuation and Estimates

Shares of Nebius have gained 50.8% in the past six months against the Internet – Software and Services industry’s decline of 9.9%.

In terms of price/book, NBIS’ shares are trading at 5.56X, higher than the Internet Software Services industry’s ratio of 3.41X.

The Zacks Consensus Estimate for NBIS’ earnings for 2026 has been revised upward over the past 60 days.

NBIS currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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