Shares of Nebius Group (NBIS) advanced roughly 8% on Thursday after two major banks issued more constructive views on the AI cloud provider, with Bank of America raising its revenue estimates and BNP Paribas upgrading the stock.
Bank of America reiterated its Buy rating and kept a $310 price target, but lifted its revenue expectations for Nebius across 2026, 2027 and 2028. Analyst Tal Liani highlighted the company's contract structure, noting that Nebius locks in long-duration agreements with hyperscalers to create a stable base of infrastructure utilization while reserving part of its capacity for shorter contracts.
According to Liani, those shorter agreements, typically spanning one to three years, are priced at roughly twice the rates charged to hyperscalers. That mix could allow Nebius to pair predictable demand from anchor customers with higher-margin spot business, and the analyst said the higher revenue should support margin expansion over time.
BNP Paribas turns bullish
BNP Paribas moved to Outperform from Neutral on Nebius and sharply increased its price target to $399 from $260, reflecting a more optimistic assessment of the company's prospects as it scales its AI cloud infrastructure.
The upgrade underscores how demand for high-end computing capacity has reshaped expectations for Nebius, which has positioned itself as a supplier of Nvidia GPU cloud services. The business remains capital intensive, requiring heavy spending on data centers and hardware, and that outlay creates financial risk if customer usage or new contract signings fail to grow as anticipated. The pace of the company's infrastructure ramp and its continued cash burn remain central considerations for investors.
GPU price increases signal demand
Separately, Nebius was reportedly preparing another round of price increases for several on-demand Nvidia GPU resources effective October 1. The changes are said to affect Nvidia's H100, H200, B200 and B300 chips, with on-demand rates potentially rising by roughly 17% to 21% depending on the model, according to customer communications circulated online and later reported by Stocktwits.
Under the reported changes, the H100 rate would climb to $4.50 from $3.85, while the H200 rate could rise to $5.40 from $4.50. If confirmed, it would mark the second price increase in about three months, a signal of continued demand for high-end AI computing capacity and of Nebius' ability to charge more for its GPU cloud services.
Fundamentals and risks
Nebius reported second-quarter AI cloud revenue of $574.9 million with an adjusted EBITDA margin near 50%. At the same time, $7.8 billion of infrastructure was still classified as not yet in use, indicating substantial capacity that has yet to be monetized.
For longer-term investors, the combination of AI cloud revenue growth and a growing backlog points to a pipeline of demand as that capacity comes online. However, the valuation leaves limited room for execution missteps, and the capital-intensive nature of the business remains a key risk as Nebius continues to build out its footprint.
This article is for informational purposes only and does not constitute financial advice.
