Nebius Posts $130M Operating Profit, Lifts Capex by $4.5B as GPU Demand Outstrips Supply

The AI infrastructure gold rush is producing real bottom-line results for Nebius. The cloud computing specialist swung to a $130 million adjusted operating profit in the first quarter of 2026, a dramatic reversal from the year-ago loss that sent shares soaring more than 21% on Wednesday to a fresh record high.

Revenue hit $399 million, representing a 684% surge from the prior year and a 75% jump from the fourth quarter. Operating margin nearly doubled to 45%, while the annualized recurring revenue run-rate climbed to $1.92 billion from $1.25 billion at the end of December. The company’s market capitalization now exceeds $58 billion.

Management attributed the momentum to a favorable supply-demand imbalance in the GPU market. Nebius has been able to raise prices on all chip types and still sell out its capacity. That pricing power has caught the attention of sell-side analysts. Goldman Sachs raised its price target by 28% to $205, with analyst Alexandar Duval pointing to strong operational execution. DA Davidson bumped its target to $250, and Citizens went even further to $270. Wolfe Research, however, stuck with “Peer Perform,” citing execution and financing risks despite assured demand from marquee customers like Microsoft and Meta.

Should investors sell immediately? Or is it worth buying Nebius?

The rapid expansion is costing Nebius dearly. The company raised its capital expenditure guidance for fiscal 2026 by $4.5 billion to the middle of its previously disclosed range. A new site in Pennsylvania has been secured with up to 1.2 gigawatts of power capacity, adding to a second data center already under construction in Missouri. Nebius aims to have over four gigawatts of contracted power by the end of 2026.

To help fill those servers, Nebius formed a distribution partnership with TD SYNNEX, which will offer dedicated NVIDIA HGX B300 clusters on the Nebius AI Cloud through its Infrastructure-as-a-Service portfolio.

The company ended the quarter with $9.3 billion in cash, partly from convertible bond issuance and an equity stake from Nvidia. Even so, management warns of a prolonged period of negative free cash flow as hardware purchases and facility buildouts accelerate. Full-year revenue is still expected to land between $3.0 billion and $3.4 billion. Analysts caution that margins could temporarily compress in the second quarter as new server capacity comes online before it is fully utilized.

At roughly 16 times forecast sales, Nebius’s valuation already reflects a high degree of optimism, with no net profit expected for 2026 or 2027. But for now, the company is delivering exactly the narrative the AI market wants to hear — explosive growth, rising pricing power, and a growing backlog of contracted capacity. Whether it can sustain the pace without diluting shareholders remains the open question.

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