Google parent Alphabet is running out of its own computing capacity. That admission, buried in a post-earnings call, has thrown a spotlight on a small group of companies that rent out server space to the tech giants — and none has more riding on that shift than Nebius Group.
Finance chief Anat Ashkenazi told analysts last week that Alphabet would lean more heavily on external data center providers starting in the third quarter, calling it a “bridge strategy” while the company races to build its own infrastructure. The confession came alongside a sharply higher capital expenditure forecast for 2026: Alphabet now expects to spend between $195 billion and $205 billion, up from an earlier range of $180 billion to $190 billion, as customer demand for computing power outstrips even the company’s aggressive expansion plans.
The market took notice. Shares of Nebius and CoreWeave surged in after-hours trading, with IREN joining the rally. The logic is straightforward: if Google — one of the world’s largest operators of data centers — is hitting capacity constraints, the so-called “neocloud” providers that hyperscalers turn to for overflow are likely to see a surge in business.
Nvidia Deepens Its Bet
The Google news arrived just as Nvidia disclosed it had built a passive 9.3% stake in Nebius. The chipmaker purchased roughly 21 million additional shares on July 13 at $210.51 each, bringing its total holdings to about 22.26 million shares — roughly one-fifth of Nvidia’s entire equity portfolio.
The timing was no coincidence. Nebius had just achieved a technical milestone at its Finland facility, powering up and beginning validation of the first Nvidia rack from the new Vera Rubin NVL72 generation, equipped with Nvidia Spectrum-6 switches. That platform has been in full production since June and is already deployed at Google Cloud, Azure, Oracle Cloud Infrastructure, and CoreWeave.
The Nvidia backing carries weight beyond the balance sheet. It signals that the chip giant sees Nebius as a strategic partner in the infrastructure buildout, not just a passive investment. Baird analysts, who upgraded Nebius to “Strong Buy” on July 23, point out that the company owns most of its own infrastructure, develops its own hardware, and has built a proprietary software product in the Token Factory inference platform. That combination, Baird argues, positions Nebius to be one of the fastest-growing providers in the sector.
The Numbers Behind the Story
The financial picture is starting to match the narrative. Nebius reported a loss per share of $0.23, crushing the consensus estimate of a $0.81 loss. Revenue hit $399 million, up 684% year-over-year and ahead of the $375.13 million analysts had expected. For the full year 2025, the company posted revenue of $529.8 million with an operating profit of $29 million, though net losses reached $446.7 million.
The growth trajectory has attracted a broad analyst following. Northland Securities raised its price target to $410, while the average rating across 17 analysts sits at “Moderate Buy” with a $222.15 target, split among three “Strong Buy,” nine “Buy,” and five “Hold” ratings. The 12-month consensus price target stands at $258.13.
Should investors sell immediately? Or is it worth buying Nebius?
To fund its expansion, Nebius recently closed a $775 million secured credit facility, priced at SOFR plus 2.50% and maturing in October 2030. A syndicate led by MUFG and including ABN AMRO, Bank of America, Deutsche Bank, HSBC, Citi, Crédit Agricole, ING, Morgan Stanley, and Goldman Sachs provided the financing. The facility is backed by Nebius’s deployed GPU infrastructure and payment streams from an investment-grade customer. The company expects to invest between $16 billion and $20 billion in 2026 and has disclosed contracted revenue with Microsoft and Meta exceeding $40 billion.
The Other Side of the Trade
For all the bullish signals, the stock tells a more complicated story. At €194.48, Nebius shares remain 25.5% below the 52-week high of €261.00 reached on June 22. The 50-day moving average sits at €199.24, just above the current price — a level that could determine near-term direction.
The annualized 30-day volatility of 111.41% underscores how sensitive the stock is to news from the hyperscaler ecosystem. A single comment from Alphabet’s finance chief can move the stock by double digits, but so can a disappointing earnings print or regulatory headwind.
Insider selling has been notable. The CEO sold 46,627 shares at $235.45, the CFO sold 1,509 at $276.20, and the CTO sold 16,937 at $235.45. Over the past three months, insider sales totaled 668,405 shares worth $140.4 million. Sweden’s Andra AP fonden cut its position by 32.1% in the first quarter, leaving just 35,254 shares. Institutional ownership stands at 21.90%.
Baird flags risks as well, including Meta’s planned cloud initiatives and potential regulatory hurdles for new data center construction. Still, the bank sees demand for AI compute as so robust that any slack from one hyperscaler would likely be absorbed by another.
What Comes Next
Nebius reports its next quarterly results in early August. That will be the moment to test whether the demand signals from hyperscalers have translated into signed contracts and higher capacity utilization. For now, the stock sits just below its 50-day average — a technical level that has historically determined short-term momentum.
The broader picture remains striking. Over the past 12 months, Nebius shares have gained 337.97%, a return that puts the current correction in perspective. The question is whether the company can execute on its $40 billion-plus contracted backlog while navigating the volatility that comes with being a key supplier to the world’s most demanding AI customers.
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