Nebius Just Exploded 34% on Blowout Earnings—Is It Time to Buy?

Key Points

• Nebius Group shares surged nearly 34% on Aug. 12 after second-quarter revenue jumped 454% year over year to $582.3 million.
• Annualized run-rate revenue reached $3 billion, up 598% year over year, as the company raised its year-end contracted power target to 5 gigawatts to meet surging demand.
• Despite strong technical momentum and reclaimed moving averages, Nebius trades at roughly 130 times trailing sales, prompting caution about valuation before buying.

Nebius Group NASDAQ: NBIS, one of the most exciting neocloud names in the world, exploded almost 34% on Aug. 12 following the release of its second-quarter results. The timing could hardly have been better for the company.

The stock had fallen significantly from its 52-week high, dragged down by the broad risk-off sentiment sweeping across the AI trade. Wednesday's surge changed that picture in a single session. But after a move this large, the big question now is whether this is the time to buy or if the easy money has already been made.

A Blowout Quarter

The results were nothing short of spectacular, hence the remarkable 34% surge. Nebius reported Q2 revenue of $582.3 million, a staggering 454% increase year over year and up 46% from the prior quarter. The core Nebius AI cloud business grew even faster, surging over 500% year-over-year to $574.9 million and accounting for roughly 98% of total group revenue. The company posted a per-share loss of just 12 cents, dramatically better than the 67-cent loss analysts had modeled, and generated $236 million in positive adjusted EBITDA.

Perhaps the most important figure was the annualized run-rate revenue (ARR), which reached $3 billion as of the end of June, up 598% year over year and 56% from the $1.9 billion reported at the end of March. That ARR trajectory is the clearest evidence yet that Nebius is scaling at an almost unprecedented pace in the infrastructure space. Management reaffirmed full-year 2026 guidance of $3.0 billion to $3.4 billion in revenue and a $7 billion to $9 billion ARR target.

Demand Is Not the Problem—Capacity Is

The most telling theme from the quarter was that Nebius is not struggling to find customers. It is racing to build fast enough to serve them. The company raised its year-end contracted power target to 5 gigawatts, a figure that has now increased fivefold since August 2025. The AI cloud business expanded its adjusted EBITDA margin to 50%, up from 24% in Q4 2025, a remarkable improvement that shows scale is translating directly into profitability.

CEO Arkady Volozh drove the point home in his letter to shareholders, saying the company could sell its entire planned 2027 capacity today under current terms, but is deliberately holding some supply back for higher-priced, shorter-duration deals. Those short-term agreements are reportedly being negotiated in the range of $40 million to $50 million per megawatt, and sometimes higher. When a company turns down the chance to pre-sell next year's capacity because it expects to command better pricing later, it says everything about the strength of demand. The expansion is being funded through customer prepayments, a $775 million asset-backed debt facility, and an asset-light partnership model that limits balance-sheet strain.

The Technical Picture

From a technical standpoint, the stock has made major progress in resuming its upward momentum. Wednesday's move completely changed the look of the chart. Nebius has now reclaimed all of its key moving averages, and importantly, it has broken through the $220 resistance level, the exact spot it had failed from on three separate occasions.

That $220 area should now turn into support on any future pullbacks, and holding above it is what would allow the bulls to sit comfortably. After such a large earnings-driven move, though, a few days of price digestion may be what the bulls would welcome most, allowing the stock to consolidate its gains rather than extend too far, too fast.

So, Is It Time to Buy?

Here is where investors need to balance enthusiasm with discipline. The business is firing on all cylinders, and the quarter resolved many of the questions hanging over the stock. But the valuation remains extreme. Even after its recent pullback and despite explosive growth, Nebius trades at roughly 130 times trailing sales, a multiple that leaves little room for disappointment and helps explain the stock's ferocious volatility.

For long-term believers in the AI infrastructure buildout, this quarter was powerful confirmation that Nebius is among the sector's genuine leaders. And for those looking to gain exposure to this leader, the more prudent approach may be to watch how the stock handles that $220 zone and let the dust settle before committing.

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