Nebius Group N.V NBIS is doubling down on AI infrastructure and has now set an ambitious $20-$25 billion capital expenditure plan for 2026, up from its earlier guidance of $16-$20 billion. The key question for investors is whether this sharp spike in spending reflects disciplined growth aligned with demand or an overextension in a fast-evolving market.
Management noted that the capacity deployment is tied to visibility into future demand, particularly for 2027, for which it already has customer commitments in place. The company also noted that it is already selling out the available capacity, with demand consistently exceeding supply, implying that spending is less speculative and more about meeting anticipated workloads.
Importantly, management highlighted that component cost increases account for a low single-digits percentage of total spend.
Nebius Group N.V. Price, Consensus and EPS Surprise
Nebius Group N.V. price-consensus-eps-surprise-chart | Nebius Group N.V. Quote
Nebius added that it will use various funding sources to fund capacity expansion. The company is raising capital through asset-backed financing buoyed by its contracts with Meta and Microsoft MSFT. Other financing options include corporate-level debt and an at-the-market program.
At the end of the first quarter, Nebius had $9.3 billion in cash and cash equivalents, supported by a strong operating cash flow of $2.3 billion and capital raises, including $4.3 billion in convertible notes and a $2 billion NVIDIA investment.
With demand surging, Nebius’ accelerated investment may be essential to achieve its ambitious ARR targets for 2026. But the payoff hinges on execution, continued AI demand and the ability to scale profitably amid increasing competition from the likes of CoreWeave CRWV and tech giants like Microsoft and Amazon.
Capex Plans for Other Players in the AI Infra Space
CoreWeave, another hypergrowth company (revenues surged 112% in the first quarter), has ambitious capex plans as it focuses on data center buildouts and capacity deployment. Capex for 2026 is estimated to be $31 billion to $35 billion, with $6.8 billion spent in the first quarter.
The elevated spending is tied to a massive contracted revenue backlog of roughly $100 billion, as well as some component inflation. The backlog underscores strong visibility into future demand, ensuring investments are demand-backed rather than speculative. CoreWeave added that financing is structured efficiently, with delayed draw debt facilities aligned with the operationalization of data centers, helping manage cash flow and capital deployment.
Microsoft’s capex plans dwarf both Nebius and CoreWeave. The company spent $31.9 billion in capital expenditures in the third quarter of fiscal 2026, with nearly two/thirds allocated to short-lived assets, primarily GPUs and CPUs, to support growing Azure platform demand and first-party applications. The rest of the spend was on long-lived assets supporting monetization for the next 15 years and beyond. Fiscal fourth-quarter capex is expected to exceed more than $40 billion.
For calendar 2026, Microsoft plans to invest approximately $190 billion in capex, including about $25 billion attributed to component pricing pressures, underscoring both scale and inflationary pressures in AI infrastructure.
NBIS Price Performance, Valuation and Estimates
Shares of Nebius have gained 63.7% in the past month compared with the Internet – Software and Services industry’s growth of 14.2%.
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On a price-to-book basis, NBIS’ shares are trading at 7.91X, above the Internet Software Services industry’s 3.87X.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for NBIS’ earnings for 2026 has been revised marginally upwards over the past 60 days.
Image Source: Zacks Investment Research
NBIS currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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