Nebius (NBIS) Has Pricing Power. Its Earnings Don’t Show It Yet.

Is the Buildout Outrunning the Business?

Nebius spent $8,130.3 million on property, equipment, and intangibles in the first half of 2026 alone, and total debt stood at $8,545.7 million at the end of June. Interest expense jumped to $119.1 million in the quarter from $4.8 million a year earlier, while depreciation climbed to $259.7 million from $75.2 million. The upshot was a GAAP net loss from continuing operations of $190.4 million.

The company has leaned on shareholders, too, raising roughly $2.8 billion by selling stock through an at-the-market program, even as news that Nebius Group (NBIS) plans to hike prices sent shares rocketing on strong cloud GPU demand. And with Microsoft and Meta anchoring so much of the demand story, a pullback by either would leave a hole that’s hard to fill, a concentration risk common among AI infrastructure stocks.

Prepayments soften the blow. About 70% of second-quarter deals included them, covering 50% to 60% of the related capex, and Nebius expects more than $9 billion in customer prepayments in 2026. But the company is still betting its balance sheet on demand staying tight.

Paying Up for Shrinking Earnings

At 46.08 times forward earnings, as of October 9, Nebius trades well above the sector’s 23.23 multiple. Investors usually pay that kind of premium for earnings that are about to grow fast.

Instead, analysts expect earnings per share to fall 62.73% in 2027. That forecast reflects timing more than fading demand: most second-quarter deals are tied to capacity arriving in late 2026, so the depreciation and interest land before the revenue fully does. Even so, a premium multiple on shrinking earnings means you’re paying today for profits that sit years out, and the contrast with cash-rich cloud giants like Amazon shows how much faith that takes.

Sentiment reflects the split. Short interest stands at 19.81% of the float, a sizable bet against the stock. Hedge funds moved the other way, with 87 holding Nebius in the most recent quarter, up from 70 in the prior one.

Where the Evidence Points

Nebius’s pricing power is real, and the backlog suggests demand isn’t fading. But at this multiple, the stock already assumes a smooth handoff from a costly buildout to fat profits, just as earnings are expected to shrink. The setup suits investors comfortable with sharp swings who believe AI compute stays scarce through 2027. Softening GPU pricing, or trouble funding the next gigawatt without heavy dilution, would weaken the case quickly.

While we acknowledge the risk and potential of NBIS as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than NBIS and that has 10,000% upside potential, check out our report about this cheapest AI stock.

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