Nebius Takes the AI Stage: Can Microsoft’s $17B Partner Prove It’s the Next CoreWeave?

Artificial intelligence infrastructure firm Nebius Group (NBIS) will take center stage Tuesday morning when it reports third-quarter results, just hours after peer CoreWeave (CRWV) delivers its own earnings tonight. The two companies have become bellwethers for the “neocloud” sector — a fast-growing segment of the AI infrastructure market built around specialized data centers optimized for high-performance compute. For investors, NBIS’s print will help gauge whether demand for AI compute capacity remains as insatiable as last quarter’s backlog expansions suggested, or if the sector’s rapid ascent is showing early signs of strain.

Nebius has been positioning itself as one of the most advanced AI-focused cloud providers, a company purpose-built for model training, inference, and large-scale machine learning workloads. It’s the only neocloud operating at the intersection of hyperscaler partnerships, sovereign compute expansion, and enterprise AI adoption. The company’s architecture differs from traditional cloud giants — instead of running broad-based storage or SaaS workloads, its infrastructure is custom-tailored for GPU-intensive computing. That specialization has allowed Nebius to attract large clients, notably Microsoft, which signed a massive $17.4 billion deal in September to lease Nebius GPU capacity through 2031, with an option to expand to $19.4 billion. The agreement cemented Nebius’s credibility as a top-tier AI compute supplier and marked one of the largest single contracts in the sector to date.

In addition to Microsoft, Nebius recently launched its Nebius Token Factory — a next-generation inference-as-a-service platform designed to streamline open-source model deployment at scale. The platform unifies fine-tuning, deployment, and governance into one enterprise-grade system, making it a competitor to offerings such as Amazon’s Bedrock and Google’s Vertex AI. The company also continues to broaden its ecosystem through investments such as Avride, its autonomous mobility subsidiary. Uber and Nebius recently co-led a $375 million funding round in Avride, which plans to launch a robotaxi service on the Uber platform in Dallas by late 2025. That partnership underscores Nebius’s growing reach beyond pure compute and into applied AI — particularly in edge deployments where its infrastructure and data integration can create new revenue streams.

Analysts expect Nebius to report a loss of about $0.50–$0.52 per share on revenue near $150–$155 million for the quarter. While that still represents steep losses, revenue growth continues to accelerate sharply on the back of AI-related contracts, with top-line expansion of nearly 900% year-over-year last quarter. D.A. Davdison reiterated its “Buy” rating and raised its price target to $150, citing Nebius as one of its top picks in the AI infrastructure trade. Northland went even further, lifting its target to $206 and naming NBIS its new “Top Pick,” arguing that scarcity of GPU capacity, cost advantages, and superior engineering execution justify higher terminal valuations. The firm values NBIS at roughly 12x 2026 revenue — aggressive, but consistent with the capital intensity and growth trajectory of neocloud peers.

Despite its momentum, Nebius still trails CoreWeave in scale and maturity. CoreWeave currently leads the segment with 33 global data centers, more established revenue streams exceeding $1 billion per quarter, and a backlog topping $30 billion. By contrast, Nebius remains in the earlier phase of its expansion cycle, with contracted power expected to grow from 220 MW this year to more than 1 GW by 2026. That gap reflects both its risk and its appeal — while CoreWeave represents the proven model, Nebius offers higher asymmetrical upside if execution continues to improve. Analysts note that Nebius carries less balance-sheet leverage than its peer, which helps mitigate risk in a rising-rate environment, though scaling execution remains a central concern given the company’s global buildout across the U.S., Europe, and the Middle East.

Key items to watch in Tuesday’s report will be forward guidance and capacity updates. Investors will focus on whether management reaffirms its 2025 ARR outlook of $900 million to $1.1 billion, and how quickly new data centers — particularly in New Jersey, the U.K., and Israel — are ramping. Commentary around its Finnish expansion and any potential new Microsoft or hyperscaler contracts could serve as major catalysts. Analysts will also scrutinize CapEx trends; Nebius guided to roughly $2 billion in 2025 spending, and investors want reassurance that those investments are matched by committed contracts. Any updates on Avride’s Dallas robotaxi rollout, customer diversification beyond Microsoft, or Token Factory monetization will also factor heavily into sentiment.

Ultimately, Nebius’s upcoming earnings will serve as a critical check-in for the neocloud investment thesis. The company has already proven that it can win major hyperscaler business and deliver cutting-edge infrastructure tailored for AI workloads. What remains to be seen is whether that growth can sustain under the weight of massive capital demands and intensifying competition from both established giants and new entrants. For now, analysts see little sign of slowdown — but with AI infrastructure stocks trading at elevated multiples and volatility still high, Tuesday’s results could set the tone for the next phase of the AI infrastructure trade.