This article first appeared on GuruFocus.
Nebius shares jumped about 15% on Wednesday after a quarterly revenue beat, while the AI infrastructure company maintained its 2026 outlook and plans to keep spending on data center capacity.
The company's AI cloud revenue surged 514% year over year to $575 million, helping annual recurring revenue reach $3 billion.
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Nebius also highlighted four large AI cloud contracts, each carrying an average total contract value above $1 billion, while customer prepayments are expected to exceed $9 billion this year.
The company spent about $5.7 billion on capital expenditures in the second quarter, mainly on GPUs and data center expansion, and expects to continue investing through year-end.
Nebius reiterated its full-year targets, including annualized run-rate revenue of $7 billion to $9 billion, group revenue of $3 billion to $3.4 billion and an adjusted EBITDA margin of about 40%.