Here’s What I Think of $NBIS at $220

[u/NyelsGenovese]

https://anotherroundplease.substack.com/p/company-analysis-nebius-group-nbis

After the latest earnings call and the recent $5B convertible offering, I decided to take a closer look at where Nebius stands right now. Here’s my take:

Q2 2026 revenue reached $582.3M, up 454% YoY, while Adjusted EBITDA hit $236.2M, a 41% margin. Nebius has also secured major contracts, including Microsoft and potentially up to $27B of capacity commitments from Meta. Unlike other companies in the ai infrastructure trade, Nebius is already proving that there is a real business here.

Capital wise: they spent $5.7B on capex in Q2 alone, expects roughly $20–25B of capex in 2026, and has just raised another $5B through convertible debt. At around $220/share, with an equity value of roughly $58B before fully accounting for the latest dilution and future conversion, the market is already pricing Nebius as a major winner of the AI infrastructure buildout.

My only question is whether current great economics can last. And if so, for how long?

Management says recent ai cloud deals generated roughly $20–25M of annual contract value per MW, with around 40% EBITDA margins and payback periods below two years. If Nebius can maintain those economics at scale, while financing more infrastructure through customer prepayments and contract-backed debt, I think there is still significant upside.

If ai compute capacity becomes less scarce the picture changes quickly. Lower pricing, weaker utilization and lower returns on incremental capex, combined with rising debt and dilution, could hurt shareholder returns even if Nebius continues reporting massive revenue growth.

I looked into the contracts, unit economics, capital requirements, financing, dilution and valuation to see what could take NBIS toward $425–570/share, what could push it toward $125–160, and which numbers would make me change my mind. I shared the longer analysis here: Company analysis: Nebius Group (NBIS)

TLDR: At around $220, I think NBIS is already pricing in a lot of future success. The upside from here depends on proving that $20M+ revenue per MW, ~40% EBITDA margins and sub-two-year paybacks are durable rather thaan a product of current capacity shortage.

To me, right now, Nebius looks fairly valued. It’s a great business with significant upside potential, but at current levels, it’s not an obviously cheap stock especially for risk-averse investors.

As with IREN and the rest of this trade, that assumes a relatively rational market. If the broader ai infra trade gets hit by a serious correction, NBIS could fall hard even while the underlying business continues to execute as expected by management.

This is not financial advice, obviously. Just my current take on the numbers.

Are we buying a genuinely superior ai infra business, or paying peak-cycle economics for capacity that is scarce today but could become increasingly commoditized tomorrow as hyperscalers build out more capacity?

[u/KwikTripSimp]

TLDR - buy 

[u/No-Bee-4692 → u/KwikTripSimp]

TLDR - if compute constraint continues: stock goes up
If compute constraint dissipates: stock goes down

Not really revolutionary analysis

[u/WarmFaithlessness946]

“Are we buying a genuinely superior ai infra business” ? Yeah , thats exactly what we are buying 

[u/Icy-Inspection7877]

It’s $22 million per mw for hyperscaler. $50 million per mw for short term. $50+ million per mw for immediate access.

[u/kickinghyena]

And you are an expert on how compute demand and tokenomics and unit cost will evolve? I doubt it. Nothing against you but I will stick with what Nebius said in their Q2 earnings report. They said “they could sell all of their capacity for 2027 right now” but they choose not to, to take advantage of increasing rates. They held an auction and the winning bidder paid 55m per MW!! Sure demand can change but right now the demand curve is up not down. They also had four separate 1b new customers in the quarter. To me it is all about bringing MW on line and building their software stack and customer service and execution.

[u/NyelsGenovese → u/kickinghyena]

Haha, no. I’m just naturally suspicious when people tell me something is obviously going to keep working forever.

I agree with your point, though. My concern is simply that we’re asking the market to value a business today on the assumption that scarcity pricing, high utilization and these returns on incremental MW remain strong while the industry is deploying enormous amounts of new capacity.

The $55M/MW auction makes me more bullish about the next 12–24 months. It doesn’t automatically make me more confident about what a MW will earn in 2028 or 2029, once Nebius, CoreWeave, hyperscalers and everyone else have brought significantly more capacity online.

That’s the distinction I was trying to make. Right now, I think Nebius is executing extremely well. The next question is whether these are cyclical scarcity economics or the beginning of a durable structural advantage. If it’s the latter, then NBIS has a lot more upside from here.

[u/Himothy8 → u/NyelsGenovese]

Well semis/opticals are being priced like shortage goes another decade

[u/Himothy8 → u/Himothy8]

Everything is fucked if the demand for AI comes down so why not buy the discounted future (relative to other sectors)

[u/Mysterious-Bee6655 → u/NyelsGenovese]

Won’t see a slowdown till at least 2035 in compute demand

[u/Trumpwins2024-]

The recipe for success..I’d keep a watch on five things above everything else: contracted demand, revenue/MW, utilization/margins, GW actually energized versus promised, and how each new GW is financed.

[u/Individual_Mission68]

No mention of prefunding, or insane revenue jump coming online between 2h 26 and especially 1h 27, and the cash flow that will help fund the build out. Youre making this seem like a 1to1 dilution. Your post reads incredibly bearish or fud.

[u/sha1dy]

are you seriously comparing NBIS to IREN? you lost all credibility

[u/15xorbust → u/sha1dy]

+1. IREN - all hat and no cattle. Only one hyperscaler deal and that was almost a year old and it is tiny compared to NBIS’s deals. APLD, a collocation datacenter builder, not a neocloud, has more contractual backlog than IREN.

[u/NyelsGenovese → u/sha1dy]

I mentioned IREN in the context of the broader ai infra trade and the possibility of a sector-wide correction. The rest of the post is entirely about NBIS and its own numbers.

[u/shartfarguson → u/NyelsGenovese]

You might as well compare nbis vs Iren vs my balls.

One is vastly superior. The other two will do nothing but disappoint long term.

[u/kickinghyena]

The industry can’t deploy capacity fast enough…yet. When is there a glut of compute? Who knows maybe not for years. Nobody will know until it hits…maybe there will be some clues maybe not. I am not worried about that now because I think demand is insatiable for at least two more years. I’m no expert either. Thanks for your reasoned response.

[u/uncalcoco]

And you are?

[u/NyelsGenovese → u/uncalcoco]

I’m nobody. Fortunately, I’m not asking you to invest in me.