Nebius’s $9 Billion Revenue Guidance: Missed Target Offset by Mega-Deals

Nebius’s Big Earnings

It was mostly good news for Nebius Group(NBIS) in its third-quarter 2025 earnings report. On the negative side, the company was forced to tighten its full-year 2025 revenue guidance, a move that typically sends investors running for the hills which is why the stock reacted negatively. However, it also unveiled a new multi-billion-dollar deal with Meta and massively raised its long-term forecast, projecting an annualized run-rate revenue (ARR) of $7 billion to $9 billion by the end of 2026. That’s not too bad.

While the stock was down, I don’t think it was a reaction to the earnings as much as a correction of valuations for some of these high growth names.

The story of Nebius is the story of the current AI gold rush: the demand is infinite, the bottlenecks are physical, and the only thing holding the company back is the speed at which it can pour concrete and plug in graphics processing units (GPUs).

“2025 has been a building year as we put in place the infrastructure and framework for future rapid growth,” said founder and CEO Arkady Volozh. “We believe that we have successfully laid the foundations for an outstanding 2026”.

The Bad News (That Isn’t Really Bad)

Let’s get the short-term miss out of the way. Nebius tightened its full-year 2025 group revenue guidance to a range of $500 million to $550 million. This was a narrowing from its previous, wider guidance of $450 million to $630 million.

But in the earnings call, CFO Dado Alonso explained this wasn’t a demand problem. The company is, in fact, completely sold out. The revision is all about the exact timing of when capacity comes online.

This is the central tension of Nebius’s entire business. Its core AI infrastructure business grew at a blistering 400% year-over-year , but demand is so strong that “revenue growth was limited only by the capacity that we were able to bring online”. That’s not a bad problem to have but it does speak to the need to get better at bringing capacity online faster to meet the demand that’s out there right now and not have to turn away deals which they have done.

The $9 Billion Horizon, Fueled by Behemoths

While 2025 revenue is bottlenecked, the company’s long-term booked revenue is exploding. This is almost entirely thanks to two massive mega-deals.

1. The Microsoft Deal: Announced in September, this colossal deal is valued between $17.4 billion and $19.4 billion. Nebius confirmed it is fully on track with this contract, though the revenue will only start ramping up throughout 2026.
2. The New Meta Deal: The big news from this quarter was a second large AI infrastructure deal, this time with Meta. This agreement is valued at approximately $3 billion with a five-year term.

These deals are the foundation for the company’s stunning new guidance: an expected annualized run-rate revenue of $7 billion to $9 billion by the end of 2026. More than half of that new, massive target is already booked, thanks to these long-term contracts which means they plan to expand capacity beyond what those contracts demand and sign new deals before the year is out so it’s likely they already have something sizable in the pipeline. 

How Nebius Plans to Be Different

One of the worries about a pure AI infrastructure play is that when demand outstrips supply, things are great but what happens when that supply starts to build quickly and that demand doesn’t explode to match it. Arkady Volozh and his team laid out a clear strategy to differentiate Nebius from other cloud companies.

The strategy is simple: don’t just be a dumb provider of GPUs.

Nebius is aggressively building its own core AI cloud business. The company views the massive Microsoft and Meta deals as powerful commercial and financial accelerators that provide the cash flow to build their core AI cloud business faster. In the future, they don’t expect this business to just be a renter of hardware, they want to be the software layer on top of that as well.

To do this, Nebius is launching a large pipeline of new software and services, which leadership believes will provide deep moats. The two newest additions to this are:

• Nebius AI Cloud 3.0 Aether: This is the company’s new enterprise-ready cloud platform. It’s designed to give organizations the trust, control, and simplicity they need to run critical AI workloads. It specifically adds enterprise-grade security and compliance, including certifications like SOC 2, HIPAA, and ISO 27001-series.
• Nebius Token Factory: This is a production-scale inference platform. It’s designed to help organizations run open-source AI models in production with reliability, visibility, and control. It unifies inference, model optimization, and fine-tuning in one platform.

This software layer is already attracting a new class of customer beyond just hyperscalers. Nebius highlighted recent wins with cutting-edge AI startups like Black Forest Labs and Cursor, as well as expanded relationships with scaled players like Shopify and World Labs.

The idea is to get people on board with hardware and GPUs when demand is huge and keep them there with higher margin software and services additions that become instrumental to the business and difficult to move away from.

Feeding the Beast: How to Fund a $5 Billion CapEx Habit

Building a $9 billion-dollar-a-year business from scratch in just a few years is expensive. In the earnings call, Nebius raised its 2025 CapEx guidance from approximately $2 billion to ~$5 billion.

This spending is going directly into aggressively scaling our footprint. The company’s new capacity guidance is staggering but it leads to a massive increase in projected contracted and connected power by the end of 2025. That will be needed to drive these aggressive targets but should be good news for investors as the business is looking to take advantage of this massive demand for its services and not get left behind.

• Previous Plan (EOY 2026): 1 GW of contracted power.
• New Plan (EOY 2026): Over 2.5 GW of contracted power and 800 MW to 1 GW of connected (fully built) power.

Volozh detailed the 3-stage CapEx spend expectations: Securing land and power is cheap (~1% of total cost). Building the data center is the second stage (~18-20%). The final, and most expensive, 80% is deploying the actual GPUs. That staggering sum spent on GPUs is just music to the ears of any NVDA investors.

Nebius’s strategy is to secure as much of that first stage as possible (the 2.5 GW) while building out the second stage (the 800MW-1GW). It will only deploy the costly GPUs in line with contracted or clearly visible demand —demand it clearly has.

So, how does Nebius plan to pay for this?

The company has a three-pronged financing strategy: corporate debt, asset-backed financing, and equity.

1. Recent Funding: In September 2025, Nebius raised a total of $4.3 billion through convertible notes and a follow-on equity offering.
2. Asset-Backed Debt: The company is now in the process of raising asset-backed debt. It believes it can get attractive terms by using its biggest customers (Microsoft and Meta) as collateral, supported by the creditworthiness of those clients.
3. The ATM Offering: To maintain flexibility, Nebius announced it is putting in place an at-the-market (ATM) equity program for up to 25 million Class A shares. This program, which will be filed on November 12, 2025 , allows the company to sell shares on an efficient ongoing basis to access cash. CFO Dado Alonso was quick to add that the company will remain dilution-sensitive.

The Future: A Rocket Ship Strapped to AI Demand

When asked if he was concerned about an AI bubble, Arkady Volozh acknowledged that the situation of unbalanced demand supply is temporary. But he also stated his belief that Nebius is at the forefront of one of the most significant technological revolutions in history.

The company’s entire future is a high-stakes, high-leverage bet that this revolution will continue. Its strategy for survival, should the market turn, rests on diversifying its customers (via its moat of software), investing with a conservative, stage-based CapEx plan, and financing that growth responsibly. Whether they can pull that off remains to be seen but in the short-term, this will certainly be a volatile stock.

Even after today’s dip, this company trades at nearly a 50x multiple to 2025 sales BUT does that really matter when the company is likely to grow its ARR at least 7x next year and grow revenue by 300-700%(depending on timing of capacity coming online).

For now, Nebius’s problem is the best one a company can have: it’s selling a product the world can’t get enough of, and it can’t build the factories fast enough.

“This year, we believe that we have successfully laid the foundations for an outstanding 2026,” Volozh said. “And at the same time, 2026 is still just the beginning”.

I’ve owned Nebius since it traded in the 20s and it has since become my #1 individual holding due to the massive price appreciation. At the same time, I’ve sold 1/4th of my position to lock in profits when it traded in the 130s because this is a risky asset and those are great in a risk-on market but if anything were to happen and a correction were to occur, a stock like this even if it has great future prospects could plummet a ton simply because those future prospects are too far in the future to make any realistic projections at this time.

Disclosure : I am long NBIS, GOOGL, MSFT, META and may take long or short positions in other stocks mentioned in this article. This is not financial advice so please talk to a qualified financial professional before making any investment decisions.