Shares of Nebius Group surged 4.2% to $117.28 on April 7, defying a softer NASDAQ session and capping a remarkable 27% recovery from a March 30 low of $92.26. The bounce signals that Wall Street is digesting what was one of the largest convertible debt raises by an AI infrastructure company — and starting to like what it sees. Nebius Bounces Back After a $4.3 Billion Debt Gamble — But Can It Spend Its Way to AI Dominance Before the Bill Comes Due?
Shares surged 4.2% to $117.28 on April 7, capping a 27% rally from a March 30 low, as selling pressure from the company's massive convertible debt raise finally fades. The rebound — against a NASDAQ down 0.64% — suggests investors are no longer punishing the stock for taking on billions in new obligations and are instead betting the money will pay off.
$4.3 Billion Is a Lot of IOUs — But the Terms Were Favorable
Originally announced at $3.75 billion, the deal was upsized to $4 billion within 48 hours as orders flooded in, and full exercise of overallotment options brought the final haul to $4.34 billion. Convertible notes are essentially loans that can become stock if the share price rises high enough. Critically, the conversion price is set around $183 per share — a 57.5% premium over where the stock traded when the deal was priced — meaning existing shareholders face no dilution (new shares being created that shrink their ownership) unless the stock rises roughly 56% from here. Interest costs stay low — just 1.25% on the five-year portion — giving Nebius cheap capital in an expensive borrowing environment.
The Money Funds a $16–$20 Billion Spending Spree
Nebius has laid out capital spending guidance of $16 billion to $20 billion for 2026 , an extraordinary figure for a company that reported just $529.8 million in full-year 2025 revenue.
Customer prepayments — mainly from Microsoft and Meta — will cover 60% of expansion costs, with debt and equity funding the rest. The gap between revenue and spending is the central risk.
Mega-Contracts Provide a Revenue Floor
A five-year, up to $27 billion commitment from Meta to deploy dedicated AI cloud capacity anchors the backlog , while a Microsoft deal worth up to $19.4 billion provides additional GPU compute revenue.
Management guides 2026 revenue of $3.0–$3.4 billion with a 40% adjusted EBITDA margin (earnings before interest, taxes, and accounting charges) — which would produce roughly $1.2 billion in cash profits, fundamentally changing the math.
The Stock Is Cheaper Than It Looks — If Execution Holds
On 2026 guided revenue, the stock trades at roughly 7–8× forward sales, which sounds reasonable until you remember the company posted a $518 million net loss in 2025.
The primary risk remains a potential AI spending slowdown before infrastructure is fully built out. For now, the market is choosing to see opportunity over dilution — but any stumble on the buildout timeline will test that conviction fast.