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Nebius Group N.V. (NBIS) is undergoing a significant expansion strategy aimed at increasing its capacity to support AI workloads. By 2026, the company projects its contracted power will grow to 2.5 GW, up from 1 GW, and plans to connect 800 MW to 1 GW to its data centers by the end of 2026. The aggressive buildout plan comes as Nebius experiences strong third-quarter demand and fully sells out its available capacity.
To fund this expansion, Nebius has increased its 2025 capital expenditure guidance from approximately $2 billion to around $5 billion. The company aims to achieve a revenue target of $500-$550 million for 2025, adjusted from a previous forecast of $450-$630 million. It is also on track for an annual recurring revenue target of $900 million to $1.1 billion by the end of 2025 and $7–$9 billion by the end of 2026.
Despite this growth, Nebius faces challenges such as securing sufficient power and stabilizing its supply chain, while competing with tech giants like Microsoft (MSFT) and CoreWeave, Inc. (CRWV), both of which are rapidly expanding their AI infrastructure. Microsoft plans to increase its AI capacity by over 80% in 2025, indicating a competitive landscape in the AI infrastructure market.
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