Nebius Group (NASDAQ:NBIS) shares soared 34.14% on Wednesday, August 12, closing at $259.20 and reaching their highest level since June 30, after the AI-focused cloud infrastructure provider delivered second-quarter results that substantially exceeded market expectations.
Revenue surges as AI demand accelerates
The sharp rally followed results released before the opening bell, with Nebius reporting a 454% year-over-year increase in second-quarter revenue to $582.3 million.
The company also delivered positive adjusted EBITDA, providing another indication that rapid expansion in its AI infrastructure business is translating into improved operating performance.
Demand for Nebius’s computing capacity remained particularly strong. Management said the company signed four major contracts during the quarter, each valued at more than $1 billion.
Among those agreements was a deal with Reflection AI worth more than $1 billion through 2029, highlighting the scale of demand for the company’s AI-focused cloud infrastructure.
Nebius raises computing capacity target
Alongside its stronger financial performance, Nebius increased its target for contracted computing capacity as it responds to expanding customer demand.
The company now expects contracted capacity to reach 5 gigawatts by the end of the year, compared with approximately 4 gigawatts anticipated in May.
The revised target reinforces expectations for continued rapid growth as companies developing and deploying artificial intelligence models compete for access to high-performance computing infrastructure.
Analyst targets fall behind the share price
Despite the strong operational momentum, Nebius’s dramatic share-price increase has created a potential valuation concern.
Analysts continue to hold an overall buy recommendation on the stock, but their average price target stands at $250.75. Following Wednesday’s rally, that figure is around 3.26% below Nebius’s $259.20 closing price.
The gap suggests that the share-price surge has moved faster than analysts have adjusted their forecasts, leaving the current consensus without meaningful near-term upside at existing levels.
Could Nebius shares be overheating?
The scale and speed of Wednesday’s advance may increase the possibility of short-term volatility following the initial earnings reaction.
A 34% single-session gain can encourage investors to lock in profits, particularly when the stock has already moved above the average analyst price target.
However, the company’s underlying growth remains substantial. Triple-digit revenue expansion, positive adjusted EBITDA, multiple billion-dollar contracts and a higher computing capacity target all provide fundamental support for the longer-term investment case.
The key question for investors is therefore whether Nebius can continue delivering growth quickly enough to justify a valuation that has risen sharply following its latest results. While the company’s AI infrastructure momentum remains strong, the magnitude of the latest rally could leave the shares vulnerable to near-term profit-taking.
Nebius Group stock price
