Even before Nebius Group published its first-quarter 2026 results on Wednesday, some of the biggest names in asset management had already taken significant positions. Millennium Management opened a stake worth roughly $11.6 million, UBS Asset Management bought in with $9.1 million, and the Royal Bank of Canada added nearly $1.6 million. All three took their places in the shareholder register during the first quarter. Collectively, hedge funds and institutional investors now control 21.9 percent of Nebius shares — a strong vote of confidence for a company still re-listing under its current name.
That institutional backing is now being tested. The AI infrastructure provider reported earnings for the three months ended March 2026, with the market expecting revenue of approximately $375 million — a surge of more than 550 percent year-over-year. Analysts also forecast a loss per share of $0.77, widening from $0.42 in the same period last year. The stock, which opened the reporting day at $179.90 and traded between $178.55 and $196.46, has already rallied more than 400 percent over the past twelve months. The question is whether the operational reality can justify that kind of price action.
The $643 Million Bet on Faster AI
The centerpiece of Nebius’s strategic pivot is the acquisition of Eigen AI, a startup that develops software to make AI models run faster and with fewer computing and storage resources. The deal is valued at roughly $643 million, paid in a mix of cash and stock. Nebius plans to integrate Eigen into its Token Factory platform, a move that shifts the company’s focus away from pure hardware infrastructure toward higher-margin software services. It’s a clear attempt to move up the stack and capture recurring revenue from AI workloads.
This acquisition is part of a much larger capital deployment. Management has earmarked between $16 billion and $20 billion in capital expenditures for 2026 — a figure that dwarfs the anticipated revenue of $3 billion to $3.4 billion for the full year. The company raised cash through a multibillion-dollar convertible bond issue, providing near-term financial cover, but operating losses continue to mount. In the fourth quarter of 2025, net loss came in at $249.6 million, while capital spending hit $2.1 billion, up from $416 million a year earlier. The EBIT is expected to stay negative as Nebius races to build out capacity.
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Orders, Clients, and a $50 Billion Backlog
Nebius does not lack demand. The order backlog has swelled to nearly $50 billion, anchored by a multiyear contract with Meta Platforms and a commitment of up to $19.4 billion from Microsoft. Nvidia has also invested $2 billion strategically, supporting the global expansion of data center sites across Europe and the United States. By the end of 2026, the company aims to have 16 data center locations online, with connected power ranging from 800 megawatts to 1 gigawatt.
Bank of America, which rates the stock a buy, has cautioned that the fulcrum is how quickly Nebius can bring new capacity online without crushing its margins. Eight of ten analysts currently recommend the stock, but the valuation leaves no room for error. The price-to-book ratio stands at 9.75, more than double the industry average of 3.9. The company’s strong free cash flow burn and elevated debt levels weigh on the fundamental picture.
What the Numbers Must Prove
Investors are now looking for hard evidence that the scaling is working. Management has set a target for annualized recurring revenue to exceed $7 billion by year-end — a sevenfold leap from the projected 2026 top line. On the conference call at 2:00 p.m. Central European Time, analysts will press for details on the timeline for integrating Eigen AI and whether the margin trajectory can improve as revenue scales.
For now, Nebius remains a high-stakes growth story. The institutions that bought in before the quarterly release are betting that the company can translate explosive revenue growth into sustainable profitability, even as it burns through billions in capital. Wednesday’s numbers are the first concrete data point in that wager.
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