Nebius (NBIS) shares surged on Tuesday after Nvidia (NVDA) disclosed a 9.3% stake in the Amsterdam-based neocloud, reigniting investor enthusiasm for one of Europe’s fastest-growing AI infrastructure plays. The stock jumped 7% in premarket trading, lifting its market capitalization to $46 billion and extending a rally that has seen shares gain nearly 250% over the past 12 months.
Nvidia had previously announced a $2 billion investment in the Dutch company, which is listed on the Nasdaq. As part of that collaboration, the two firms will work together on AI infrastructure deployment, fleet management, inference, and AI factory design and support. In March, Meta signed a long-term agreement to spend up to $27 billion on Nebius’ AI infrastructure, further cementing the company’s position as a key supplier of AI computing power in Europe.
The demand is showing up in the numbers. Nebius reported revenue growth of 684% year-over-year to $399 million, with its AI cloud business expanding even faster at 841%. Annual recurring revenue has reached a run rate approaching $2 billion, and management still expects ARR to hit between $7 billion and $9 billion by the end of 2026. To fuel that expansion, the company spent $2.5 billion in capital expenditures in the first quarter alone.
On Monday, Freedom Capital Markets upgraded Nebius to a buy rating, calling the company’s recent $775 million senior secured debt raise a “positive catalyst.” That financing, the firm’s first of its kind, is backed by deployed GPU infrastructure and contracted cash flows from an agreement with an investment-grade customer.
Despite the strong operational momentum, Nebius shares have been volatile. After soaring more than 400% over the past year to a peak of $299, the stock has pulled back roughly 32%, though it still trades at a lofty price-to-sales ratio of 58 times. The Nvidia disclosure has once again put the European AI cloud name in focus, but the combination of a premium valuation and massive capital spending plans means the stock is likely to remain a high-volatility bet.
