Nebius Group (NBIS 2.76%) stock has been on an absolute tear in 2025. The stock's price has more than tripled, up around 225%, while also being down 33% from all-time highs established in October. Given that volatility, investors are likely wondering where Nebius' stock will go heading into 2026.
While it will be difficult to post 200%-plus annual gains, Nebius may be in line to double in value, especially with all the massive artificial intelligence (AI) spending planned for 2026.
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Nebius believes that 2026 will be even better than 2025
Nebius was formerly a part of Yandex, essentially the Russian equivalent of Google. Following the outbreak of the Russia-Ukraine war and all the sanctions that fell on Russia, Yandex decided to split its company into Russian and non-Russian assets, and Nebius was spun out. Nebius, now headquartered in Amsterdam, is a technology company that has pivoted its operations and now provides AI infrastructure.
Nebius is another way to invest in the thriving artificial intelligence boom, as it offers full-stack capabilities with best-in-class graphics processing units (GPUs) at the data centers it owns or leases. Nebius' biggest clients include Meta Platforms (META 2.46%) and Microsoft (MSFT 0.41%), and it has signed large, multi-year contracts with both of them.
The demand for AI computing power in data centers isn't expected to slow down, and Nebius has modified its initial 2026 plans as a result. Previously, it expected to contract 1 gigawatt of computing power for 2026. Now, it's upped that guidance to more than 2.5 gigawatts. It's increasing its power needs because it has sold out all available computing capacity for the third quarter.
NASDAQ: NBIS
Key Data Points
It's sold out of capacity, resulting in unbelievable revenue growth of 355% year over year to $146 million in Q3. However, that's a drop in the bucket compared to where Nebius will be next year.
For the full year, it's expecting $500 million to $550 million in revenue. Because it's growing so fast, that number is much smaller than the $900 million to $1.1 billion in annual recurring revenue (ARR) it expects to achieve. For most companies, ARR would be how much revenue they would generate each year if they ceased all growth opportunities. So, seeing this figure so much higher than actual revenue showcases Nebius' impressive growth. While 2025 has been good, 2026 will be even better.
Nebius management believes the company can achieve a $7 billion to $9 billion ARR at the end of 2026. At a minimum, that's seven times Nebius' current ARR. Growth like that gets investors excited, and it could easily translate into a stock that can double, as long as you don't have to overpay for the stock now.
Nebius is unprofitable, and its stock is expensive
Valuing Nebius stock isn't easy. Profits aren't even close to becoming a reality, so valuing the company based on forward earnings isn't possible. Although it brought in $146 million in revenue during Q3, its net income loss totaled $120 million. Nebius is funding its growth at the cost of profitability, which may turn some investors away. Nebius will likely continue to stay unprofitable as it expands its operations to account for the massive surge in computing demand.
From a price-to-sales (PS) standpoint, Nebius stock is very expensive at nearly 60 times sales. That's expensive for a stock in general, let alone one that's as unprofitable as Nebius is. However, its growth is incredible, and if it grows at the pace investors expect, valuation may not be as big a concern.
Data by YCharts.
The real factor in Nebius stock performance in 2026 will be the market's appetite for risk. The market is currently somewhat bearish on AI sentiment, even if the spending is happening. The market wants to see real returns from the AI hyperscalers, and it's not seeing that right now. Time will tell what will happen with Nebius stock, but I could easily see the stock doubling in price in 2026 if bullish sentiment returns, or getting cut in half if the market takes a bearish outlook.
As a result, I'd rather invest in a more surefire pick like Nvidia, which is providing GPUs for companies like Nebius at a high profitability level.
