The competitive landscape in AI cloud infrastructure is undergoing rapid transformation. NEBIUS Group released its Q1 earnings on Wednesday, far exceeding expectations with revenue nearly octupling, sending its stock price soaring over 18% in a single day and pushing its market capitalization close to that of CoreWeave, Inc., valued at $64 billion. This Amsterdam-based cloud company is narrowing the gap with the industry leader at a startling pace, turning their rivalry into the most watched head-to-head contest in the AI infrastructure race. The earnings report shows NEBIUS's Q1 revenue reached $399 million, a nearly eightfold increase from $50.9 million in the same period last year, surpassing Wall Street expectations of $371.4 million. Its adjusted net loss was $100.3 million, which, while wider than the $83.6 million loss a year ago, was significantly better than the analyst-expected loss of $174 million. Concurrently, the company raised its full-year capital expenditure forecast to $20-25 billion, up from the previous range of $16-20 billion. Boosted by the earnings, NEBIUS's stock surged 18% on Wednesday. According to Dow Jones Market Data, its market cap approached $53.9 billion at one point, while CoreWeave, Inc.'s market cap was approximately $60.9 billion at that time. NEBIUS has gained 147% year-to-date and nearly 400% over the past 12 months.
Revenue Soars, But Losses Widen NEBIUS's revenue growth rate has impressed the market, but its profitability pressures are equally noteworthy. Q1 capital expenditures were approximately $2.5 billion, a significant increase from $544 million in the same quarter last year, primarily for purchasing NVIDIA GPUs and data center hardware. Analysts note that despite strong revenue growth, the high capital spending continues to put noticeable pressure on margins. In response, CEO Arkady Volozh stated that the increased spending reflects the company's forward-looking assessment of demand through 2027, not a loss of cost control. "We routinely see multiple customers vying for every batch of GPUs that come online," he said. The company plans to fund its rapid expansion through asset-backed financing and corporate debt while strictly managing operational costs. Capacity Race: The Gap with CoreWeave, Inc. is Narrowing In the core metric for measuring cloud capacity—committed power capacity—NEBIUS and CoreWeave, Inc. are now nearly neck and neck. NEBIUS currently has over 3.5 gigawatts of committed capacity, identical to the figure disclosed in CoreWeave, Inc.'s earnings last week. However, a key difference remains: the actual operational compute capacity. CoreWeave, Inc. already has 1 gigawatt of capacity online, while NEBIUS aims to reach 800 megawatts to 1 gigawatt by the end of this year. This gap is also directly reflected in revenue scale—FactSet data shows analysts expect CoreWeave, Inc.'s annualized recurring revenue for this year to reach $18.3 billion, while NEBIUS's full-year revenue guidance is $7 to $9 billion. In a letter to shareholders, Volozh stated the company is advancing a "dual-track strategy": accelerating capacity deployment to support near-term growth while continuously securing land and power resources for longer-term expansion.
New Pennsylvania Site and Raised Committed Capacity Target Capacity expansion was another highlight of this earnings report. NEBIUS announced a new data center in Pennsylvania on Wednesday, which, at full capacity, can support 1.2 gigawatts of power. This increases its global count of sites with at least 100 megawatts of capacity from 1 at the end of 2025 to 7. The company simultaneously raised its year-end committed power capacity target from over 3 gigawatts to over 4 gigawatts. Volozh wrote in the shareholder letter, "We continue to see unprecedented demand in the market. As more industries embrace AI and companies move from experimentation to practical application, the demand for compute and cloud services is significantly outpacing available supply."
Client Portfolio and M&A Strategy In terms of client resources, the competition between NEBIUS and CoreWeave, Inc. is equally direct. NEBIUS has signed a five-year compute supply agreement with Meta worth up to $27 billion; CoreWeave, Inc. last month also disclosed an expanded multi-year contract with Meta worth $21 billion. Additionally, NEBIUS's clients include Microsoft. On the mergers and acquisitions front, NEBIUS has been active recently. A day before the earnings release, the company announced it would onboard the core engineering and research team from AI lab Clarifai and license its compute technology to enhance inference solution capabilities. Previously, the company also announced the acquisition of startup Eigen AI for approximately $643 million.
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