Key Highlights
- Bank of America launched coverage on Nebius (NBIS) with a Buy rating and $150 price target, suggesting 31% potential upside
- Shares of NBIS advanced approximately 2% in premarket trading Tuesday after the coverage announcement
- BofA identified Nebius as an “emerging leader in global AI compute,” emphasizing its specialized GPU-focused data center approach
- Meta Platforms secured up to $27 billion in AI infrastructure access from Nebius over a five-year period; Nvidia made a $2 billion strategic investment
- The company’s revenue jumped 351% year-over-year to reach $529.8 million, maintaining a 68.6% gross margin
Shares of Nebius (NBIS) climbed roughly 2% in premarket hours Tuesday following Bank of America’s initiation of coverage featuring a Buy recommendation and a $150 price objective.
BofA analyst Tal Liani, along with his research team, identified Nebius as an emerging powerhouse in the global AI compute landscape. The firm highlighted the company’s strategic positioning within the AI Infrastructure-as-a-Service sector as a primary catalyst for their positive outlook.
Nebius constructs and operates massive data centers that enable businesses to develop and deploy AI models without investing in proprietary infrastructure. BofA characterized the platform as purpose-engineered for GPU-intensive distributed computing workloads.
The research team forecasted that the comprehensive IaaS market, encompassing AI IaaS segments, will exceed $419 billion by 2028. Analysts attributed this expansion to increasing model sophistication and accelerated enterprise AI implementation.
The stock has surged 291% during the past year. Based on current trading levels, the $150 price objective represents approximately 31% additional upside potential, although InvestingPro analysis suggested possible overvaluation compared to fair value calculations. Shares traded around $114 before Tuesday’s opening bell.
Major Strategic Partnerships Strengthen Position
Earlier this month, Meta Platforms agreed to allocate up to $27 billion across five years for AI infrastructure access through Nebius. The arrangement began with a $12 billion commitment, featuring an optional $15 billion expansion component.
Nvidia separately disclosed a $2 billion equity stake in the Netherlands-based company, reinforcing confidence in its infrastructure approach.
These agreements triggered multiple analyst price target increases. BWS Financial elevated its objective to $200 from $130. DA Davidson similarly raised its target to $200 from $150 following the Meta announcement. Compass Point maintained its Buy stance with a $150 target.
Microsoft appears among Nebius’s client roster alongside Meta.
Strong Financial Performance Supports Thesis
Nebius delivered $529.8 million in revenue over the trailing twelve months, representing a 351% year-over-year increase. The company achieved a gross margin of 68.6%.
The firm also completed pricing on a $4 billion convertible senior notes offering, expanded from an initial $3.75 billion proposal. The transaction comprised $2.25 billion in 1.250% notes maturing in 2031 and $1.75 billion in 2.625% notes due 2033, marketed to qualified institutional buyers with anticipated settlement in March 2026.
Bank of America simultaneously reinstated coverage of CoreWeave (CRWV), a competitor in the AI infrastructure arena, assigning a Buy rating with a $100 price target on Tuesday.
Nebius includes Microsoft and Meta among its primary customers and maintains ongoing expansion of its data center infrastructure to address surging AI compute requirements.
