Nebius (NASDAQ: NBIS) has announced a higher-than-expected net income loss for the third quarter, though the company’s expanding partnerships with top tech players are drawing significant attention. The Netherlands-based cloud computing services provider reported a net income loss of nearly $120 million, widening from $43.6 million a year ago.
Despite the loss, Nebius’ revenue surged 355% year-over-year to reach $146.1 million, excluding discontinued operations from its AI data firm Toloka. However, this figure missed Wall Street’s projection of $155 million, alongside expectations of a $97 million net loss.
The company also revealed that an accounting change affected revenue recognition this quarter. But while its earnings may have disappointed some investors, The AI cloud provider continues to make major moves in the artificial intelligence infrastructure space.
Nebius Secures a $3 Billion AI Compute Deal with Meta
The AI cloud provider made one of its biggest reveals to date when it said it had signed a $3 billion deal with Meta Platforms (NASDAQ: META) to provide AI compute infrastructure over the next five years.
Meta wants to add more artificial intelligence to its goods and services, and this deal makes Nebius a key supplier in that effort. As part of the deal, Nvidia (NASDAQ: NVDA) accelerators will be used to build and run data centers that are optimized for AI workloads.
This comes soon after Microsoft (NASDAQ: MSFT) signed a $19 billion deal with The AI cloud provider to use GPU-based infrastructure until 2031. This makes Nebius an even better place to get AI technology.
A sale of shares with the goal of making a data center bigger
Nebius brought out its financial report along with a new stock offering of 25 million Class A shares. The idea is to raise money for building a data center soon.
By the end of 2026, Nebius wants to have more than 1 gigawatt (GW) of connected power, up from 220 megawatts (MW). This is because more and more people need computers that work quickly. The company needs to keep growing in order to keep its contracts with Meta, Microsoft, and other AI-based clients.
Stock Market Reaction: Nebius Shares Climb 6%
On the day of the earnings release, Nebius stock rose 6.2%, reaching $116.75 in early trading. This year, the stock has been on an amazing run. It went up 264% in 2025 before landing at a record high of $141.10 on October 10.
Even though the stock has been volatile recently, investors are still confident in the company’s long-term growth potential, especially since it has a strong roster of corporate clients and is still growing in the AI infrastructure market.
Core Weave Rivalry Heats Up
Nebius’ closest rival, CoreWeave (NASDAQ: CRWV), also reported earnings this week. The company beat third-quarter expectations but lowered its full-year revenue and capital spending guidance, citing capacity delays from a third-party vendor. CoreWeave shares dropped 10% to $94.63 before Tuesday’s open.
Both Nebius and CoreWeave are at the forefront of providing Nvidia GPU-equipped servers for AI model builders and app developers. However, Nebius’ growth trajectory has been significantly faster — a key factor contributing to its premium market valuation.
Is Nebius in a Bubble? Analysts Divided
After an impressive 475% stock surge over the past year, some analysts have questioned whether Nebius is entering bubble territory.
Currently, the company trades at a price-to-sales (P/S) ratio of 114, far above the U.S. tech sector’s average of 9.5. In comparison, CoreWeave trades at 19 times sales — still expensive, but less extreme.
Some people say that Nebius’s value can’t last if its sales growth keeps up at the same rate. Supporters, on the other hand, argue that, given the company’s heavy load and its long-term contracts with Meta and Microsoft, the inflated price is justified.
Big contracts are a sign of solid expansion.
Microsoft and Nebius have negotiated an agreement for $19.4 billion over five years, which will extend until 2031. This will bring in a consistent stream of money for the business. As part of the deal, the newest chips from Nvidia, AMD, and Intel will be used to power AI data centers.
Before this deal, Nebius thought it would have an average revenue run rate (ARR) of $1 billion by the end of 2025. Now that Microsoft and Meta are working together, that number could be a lot higher.
Because there isn’t enough AI infrastructure around the world, companies like Microsoft and Meta are fighting hard to get GPU capacity. Nebius is perfectly positioned to meet this demand wave.
The financial outlook: chances and risks
Nebius still has problems, even though it is growing quickly. Analysts have warned that the cloud AI business has a lot of debt, a risk of customer concentration, and a lot of competition.
IBD Stock Checkup says that Nebius has a Composite Rating of 56 out of 99, which means that it is moderately strong based on both analytical and fundamental factors. The stock’s Accumulation/Distribution Rating of E shows that institutions have been selling it recently, but investors are still very interested because the company is exposed to AI.
That said, the company’s contracts with major tech firms could stabilize its long-term growth outlook and help offset short-term financial losses.
Analysts See Potential 180% Upside by 2027
Assuming Nebius achieves projected $4.4 billion in revenue by 2027, and trades at a P/S multiple of 19 (similar to CoreWeave’s), its market cap could reach $84 billion — implying a potential 180% upside from current levels.
The company’s aggressive data center expansion and strong client pipeline suggest it could maintain its momentum in the AI infrastructure space well into the next decade.
The bottom line is that Nebius is building the infrastructure of the future for AI.
The value of Nebius is debatable, but the company’s massive AI relationships and ambitious data center expansion plan have made it one of the industry’s most watched players.
The fact that Nebius has collaborated with industry heavyweights like Meta and Microsoft demonstrates that these companies have faith in it to supply the computational power needed for the next generation of artificial intelligence.
Investors are wary due to the company’s high valuation and increasing losses, but growth-focused investors are keeping an eye on Nebius due to the company’s position in a rapidly expanding market.
