Nebius Group (NASDAQ:NBIS) released its fourth-quarter and full-year 2025 earnings this morning that demonstrated explosive growth in its AI cloud operations. The company posted massive year-over-year increases in revenue and other key metrics, driven by booming demand for GPU-based computing. Management signaled even faster acceleration ahead in 2026, backed by strong customer contracts and aggressive infrastructure expansions.
Despite the strong results, the stock is dipping in midday trading and appears tied to investor worries about soaring capital expenditures, which could weigh on near-term profitability and cash flow — even as the underlying business momentum remains robust.
Surging Revenue Amid AI Demand
Nebius Group’s revenue in Q4 surged to $227.7 million — a remarkable 547% jump from $35.2 million last year. For all of 2025, revenue reached $529.8 million, up 479% from $91.5 million a year ago. This explosive growth was primarily powered by the core AI cloud segment, which benefited from high GPU utilization and escalating demand for advanced compute resources. By the end of 2025, the company achieved an annualized run-rate revenue of $1.25 billion, surpassing its earlier guidance.
Adjusted EBITDA also flipped positive to $15 million compared to a $63.9 million loss a year earlier, though it came in below the $22.55 million analyst consensus. The net loss widened to $249.6 million in the quarter from $122.9 million, largely due to elevated operating expenses tied to rapid scaling.
Capex Escalation to Fuel Expansion
Capital expenditures accelerated sharply, totaling about $2.1 billion up from $416 million in the prior-year period, mainly for GPUs and supporting infrastructure. Full-year 2025 capex hit $4.1 billion. These investments enabled significant capacity additions, with active power capacity reaching roughly 170 megawatts by year-end — well ahead of the 100-megawatt goal. For 2026, Nebius guided capex in the range of $16 billion to $20 billion to support the rollout of nine new data centers and additional infrastructure.
Management indicated that around 60% of this spending would be covered internally via cash reserves, operating cash flow, and customer prepayments, with the balance coming from debt financing and potential asset sales.
The heavy capex is already paying dividends as Q4 revenue expanded more than six-fold year-over-year. Capacity remains sold out through at least the first quarter of 2026. GPU rental pricing also continues to rise, and customer contracts are extending in duration. Operating cash flow reached $834 million in Q4, signaling early positive returns from the buildout efforts. Looking to 2026, Nebius projects revenue of $3 billion to $3.4 billion, an annualized run-rate revenue of $7 billion to $9 billion by year-end, and adjusted EBITDA margins approaching 40%. These targets reflect confidence in sustained AI-driven demand and efficient scaling.
Acquisition Enhances AI Capabilities
Nebius also announced an agreement to acquire Tavily for $275 million,in a bid to integrate real-time agentic search capabilities into its AI cloud platform. This strategic move bolsters offerings for AI agents by combining advanced search infrastructure with existing tools, enabling more sophisticated applications such as coding assistance, data analysis, and real-world information retrieval. Tavily’s team will join Nebius while continuing to operate under its own brand, strengthening the company’s position in the fast-growing agentic AI space.
Nebius has now secured more than 3 gigawatts of power capacity by the end of 2026 — exceeding prior plans of over 2.5 gigawatts — across locations in the U.S. and Europe, the Middle East, and Africa. This includes 800 megawatts to 1 gigawatt of already connected power.
By locking in this scale early, the company gains a key advantage, allowing it to convert power into high-margin compute sales more quickly than rivals. Strategic partnerships with hyperscalers such as Microsoft (NASDAQ:MSFT | MSFT Price Prediction) and Meta Platforms (NASDAQ:META) further validate its approach and support long-term demand.
Key Takeaway
Investor concerns over aggressive capex spending are understandable, as the massive investments could lead to dilution, delayed profitability, and cash flow pressures in the short term. Yet, with major hyperscalers and AI developers clamoring for more data center capacity during a period of unrelenting demand, Nebius’s ambitious buildout appears well-timed to capture lasting market share.
Having fallen about 39% from its recent peak of $141 per share in October, Nebius’s stock now offers a potentially attractive entry point for a fast-rising leader in AI cloud infrastructure.
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