The One Neocloud I Keep Buying Again and Again Has a Secret
One neocloud keeps earning repeat buys despite a GAAP operating loss, sky-high convertible debt, and three customers dominating its revenue. The reason sits inside a single contract detail that most investors scroll right past.
I keep buying Nebius Group (NASDAQ:NBIS | NBIS Price Prediction) because every quarter the case for owning it gets sharper. I am compounding into a business whose contracted backlog dwarfs its current revenue, whose anchor customers are the same names training the frontier models, and whose CEO keeps repeating that he could sell out next year’s capacity today and is choosing to wait for better terms.
Why I Keep Hitting Buy
Nebius runs a full-stack AI cloud. It owns data centers, builds its own software stack (Nebius AI Cloud, Token Factory, Aether, and the acquired Tavily and ClarifAI assets), and sits inside NVIDIA’s inner circle as an Exemplar Cloud partner on GB300 NVL72. That combination is what earns the repeat buy from me, and it is what makes Nebius unique among neoclouds.
Three Numbers That Keep the Thesis Alive
Start with growth. Q2 2026 revenue reached $582.3 million, up 454.04% year over year, ahead of the $574.65 million consensus. The AI Cloud segment alone did $574.9 million, up 514%. Annualized run-rate revenue hit $3 billion at the end of June, up 598% YoY.
Now visibility. Remaining performance obligations sit at $37.5 billion, and deferred revenue climbed to $5,975.2 million from $1,577.5 million at year-end. Management reaffirmed FY 2026 revenue of $3.0B to $3.4B and ARR of $7B to $9B by year-end, at a roughly 40% adjusted EBITDA margin. Q2 group adjusted EBITDA already printed at $236 million, a 41% margin, with the AI Cloud segment at 50%.
Then funding. Cash sat at $8.04 billion. Operating cash flow was $2.3 billion in the quarter. Roughly 70% of Q2 deals came with upfront prepayment, and management expects more than $9 billion of upfront customer funding during 2026. The July $775 million asset-backed facility priced at SOFR plus 250 basis points, secured by GPUs and an investment-grade customer’s contracted cash flows.
Why Not CoreWeave, Meta, Microsoft, or NVIDIA
I own NBIS instead of CoreWeave (NASDAQ:CRWV) because Nebius stacks proprietary software above the metal. I would rather buy the leveraged beneficiary than pile more into Microsoft (NASDAQ:MSFT), which is already a Nebius customer through a $17.4B to $19.4B contract, or Meta Platforms (NASDAQ:META), which signed a $27 billion five-year agreement ($12B compute plus $15B flexible capacity). NVIDIA (NASDAQ:NVDA) itself planted a $2 billion strategic equity stake plus pre-funded warrants. When hyperscalers rent from you and your GPU supplier invests in you, that is where my dollars keep going.
The power, cooling, and networking suppliers feeding this same buildout are where a lot of the quieter money is being made (we profiled seven of them, chipmakers excluded, in a free report here: 7 Stocks Powering the AI Boom).
Risk I Live With
Three customers made up 24%, 21%, and 14% of Q2 revenue. Convertible debt carries at $8.5 billion with a fair value of $20.8 billion, so dilution is real. H1 capex ran $8.13 billion against a $20B to $25B full-year 2026 range, and GAAP operating loss was $175.9 million. I sit with that because the $37.5B backlog and customer prepayments cover most of the burn.
What Keeps the Buy Button Active
Contracted power guidance was raised to 5 gigawatts by year-end. Vera Rubin systems were already in Nebius labs at the time of the Q2 call. Shares are up 182.09% year to date, and CEO Arkady Volozh’s Q3 2025 line still sits at the top of my notes: “2026 is still just the beginning.” So am I.
Contact [email protected] for any questions or corrections.
Alex Sirois is a financial writer with experience spanning both retail and institutional investing. He has written for InvestorPlace and held roles at BNY Mellon and Bernstein, giving him a perspective that bridges Main Street portfolios and Wall Street analysis.
Alex holds an MBA from George Washington University and has built his career across multiple industries, including e-commerce, education, and translation — a breadth of experience that informs how he breaks down complex financial topics for everyday investors. His writing is conversational, actionable, and grounded in long-term, buy-and-hold investing principles.
At 247 Wall St., Alex focuses on delivering analysis that is both accessible and useful, with a clear emphasis on helping readers make more informed decisions with their money.
