Citigroup has significantly raised its price target for AI cloud computing service provider Nebius Group from $169 to $287, an increase of approximately 69%. This new target is about 38% above the stock's closing price of $207.27 on Tuesday. The bank maintains its "Buy" rating on the stock.
This adjustment is part of a wave of bullish sentiment on Wall Street following Nebius's first-quarter earnings report. Citizens JMP raised its target from $175 to $270, while DA Davidson increased its target from $200 to $250. Bank of America also raised its target from $175 to $205. The current average price target for the stock is approximately $172.92, with a consensus rating of "Moderate Buy."
Nebius reported first-quarter revenue of $399 million, a 684% year-over-year increase, surpassing market expectations of $375 million. The company reported a loss per share of $0.23, significantly better than the expected loss of $0.77. Revenue from its AI business reached $390 million, an 841% increase year-over-year. The group's adjusted EBITDA was $130 million, compared to a loss of $53.7 million in the same period last year. Net profit reached $621 million, primarily benefiting from a non-cash valuation adjustment related to ClickHouse financing.
During the earnings call, management announced that the company has secured over 3.5 gigawatts of power capacity, up from 2 gigawatts disclosed last quarter, with an expectation to reach at least 4 gigawatts by year-end. Nebius announced the construction of a new 1.2-gigawatt AI facility in Pennsylvania, marking its second company-owned gigawatt-scale site following one in Missouri. The company has signed a five-year, $27 billion computing contract with Meta, which includes $12 billion in dedicated capacity and an optional $15 billion. Nebius also secured a $2 billion equity investment from Nvidia. Management reiterated its full-year 2026 revenue guidance of $3.0 billion to $3.4 billion and an annualized run-rate revenue target of $7 billion to $9 billion.
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