Nebius shares rose more than 15% in premarket trading after the company beat quarterly revenue estimates for the second quarter. The Nvidia-powered AI cloud provider reported sales of $582.3 million, exceeding the $572.75 million expected by analysts, according to LSEG data.
The results underscore booming demand for AI infrastructure, which helped Nebius land larger contracts and increase prices. The company closed four deals averaging over $1 billion each during the quarter, and its total contract value nearly quadrupled from the prior quarter. New-customer contract values jumped more than ninefold.
Nebius' total sales in the second quarter, beating estimates of $572.75 million.
CEO Arkady Volozh said Nebius is converting growing demand into 'contracted, profitable growth.' He added that when asked about competition from xAI, demand for AI computing remained well ahead of supply and that the company could sell all of its planned 2027 capacity at current terms. Nebius retained some capacity to capture future demand.
The company raised its contracted power target for the end of 2026 to 5 gigawatts from more than 4 gigawatts previously, and expects to deploy more than 1 GW of capacity annually starting in 2027. One gigawatt is enough to power roughly 750,000 U.S. homes.
Nebius' capital expenditures totaled about $5.7 billion during the quarter, topping analysts' expectations of $4.7 billion, according to Visible Alpha. The company expects more than $9 billion in customer prepayments this year and has more than $40 billion in customer commitments.
Revenue at Nebius' mainstay AI cloud unit rose nearly six-fold in the second quarter. The results came after larger rival CoreWeave raised its annual forecasts, and shares of AI infrastructure companies broadly advanced. Investors reacted positively to earnings results and demand signals from neocloud companies CoreWeave and Nebius.
The bigger question is how diversified and durable that demand proves to be.
Emarketer analyst Jacob Bourne said demand for AI cloud capacity keeps soaring despite intensifying competition. Nebius' AI cloud deals signed in the quarter, with annual contract values above $20 million per megawatt, are expected to come online in late fourth quarter. Nebius shares have surged more than 130% so far this year.
