Nebius Group N.V. (NBIS) reported a 36.7% share price surge following its Q2 2025 earnings on August 7, with revenues escalating 625% year-over-year to $105.1 million. This growth was primarily driven by strong performance in AI cloud infrastructure, where revenues grew over nine times year-over-year.
The company raised its annualized run rate (ARR) revenue guidance from $750 million to $1 billion, now estimating it to be between $900 million to $1.1 billion. Despite this positive outlook, challenges remain due to fierce competition from giants like Amazon and Microsoft, substantial capital expenditures projected at $2 billion for 2025, and ongoing execution risks associated with scaling infrastructure. Analysts project group revenues between $450 million to $630 million, following a deconsolidation of Toloka, which eliminated $50-$70 million in projected revenues.
Despite the impressive growth, management warns that adjusted EBITDA will remain negative for the full year but is expected to turn slightly positive by year-end. Investors are advised to consider the competitive landscape and potential execution risks when evaluating their positions in NBIS.
