Key Highlights
- Bank of America launched coverage on Nebius (NBIS) stock with a Buy rating and $150 price target, suggesting 31% potential upside
- Shares of NBIS rose approximately 2% in premarket trading Tuesday after the analyst initiation
- BofA analysts described Nebius as an “emerging leader in global AI compute,” emphasizing its GPU-focused data center approach
- Meta Platforms secured a deal worth up to $27B across five years for Nebius AI infrastructure; Nvidia made a $2B investment
- Company revenue jumped 351% year-over-year to reach $529.8M, achieving a 68.6% gross margin
Nebius (NBIS) shares advanced roughly 2% in premarket hours Tuesday following Bank of America’s initiation of coverage with a Buy recommendation and a $150 price objective.
BofA analyst Tal Liani and colleagues characterized Nebius as a rising force in the global AI computing sector. The team highlighted the firm’s strategic positioning within the AI Infrastructure-as-a-Service marketplace as a primary driver behind their positive outlook.
Nebius constructs and operates expansive data centers, enabling businesses to train and deploy AI models without investing in their own infrastructure. BofA portrayed it as a specially designed platform optimized for GPU-intensive distributed computing tasks.
The research team forecasted that the overall IaaS market, encompassing AI IaaS, will exceed $419 billion by 2028. According to their analysis, increasing model sophistication and accelerated enterprise AI adoption are fueling this expansion.
The stock has surged 291% during the past twelve months. Based on current trading levels, the $150 price objective represents approximately 31% additional upside potential, although InvestingPro analysis indicated the stock may be trading above its fair value estimate. Shares were hovering around $114 before Tuesday’s trading session.
Strategic Partnerships with Meta and Nvidia Strengthen Position
Earlier in the month, Meta Platforms agreed to invest up to $27 billion across five years to utilize AI infrastructure from Nebius. The agreement began at $12 billion, with options for an extra $15 billion.
Nvidia separately announced a $2 billion stake in the Netherlands-based company, further validating its infrastructure strategy.
These partnerships triggered a wave of analyst price target increases. BWS Financial lifted its objective to $200 from $130. DA Davidson similarly upgraded to $200 from $150 following the Meta agreement announcement. Compass Point maintained its Buy stance with a $150 target.
Microsoft also appears among Nebius’s client roster, together with Meta.
Strong Financial Performance Supports Growth Narrative
Nebius posted revenue of $529.8 million during the trailing twelve months, representing a 351% increase year-over-year. The company achieved a gross margin of 68.6%.
The organization also finalized a $4 billion convertible senior notes offering, expanded from an initial $3.75 billion proposal. The transaction consisted of $2.25 billion in 1.250% notes maturing 2031 and $1.75 billion in 2.625% notes maturing 2033, distributed to qualified institutional buyers with an expected March 2026 settlement date.
Bank of America simultaneously resumed coverage of CoreWeave (CRWV), a competitor in the AI infrastructure domain, assigning a Buy rating and a $100 price target on Tuesday.
Nebius includes Microsoft and Meta among its major customers and is actively expanding its data center presence to satisfy growing demand for AI computing resources.
