An analyst downgraded Nebius Group N.V. (NASDAQ:NBIS) to a Hold rating. The downgrade reflects concerns over execution risks and a high valuation.
Nebius plans to invest between $20 billion and $25 billion in capital expenditure. This funding will build a full-stack AI cloud infrastructure.
The company reported a 684% year-over-year revenue increase in the first quarter of 2026. Management stated that demand for AI computing power currently exceeds available supply.
Aggressive expansion is expected to delay positive free cash flow until at least 2029. The company currently maintains a strong cash position and receives customer prepayments.