Shares of Nebius, the AI cloud infrastructure company spun off from Yandex, surged on Tuesday after Nvidia disclosed a 9.3% beneficial ownership stake in a Schedule 13G filing. The stock closed just under $217, a gain of 19% on the day, according to multiple sources, with some reporting nearly 19% and others 17%. The stock had already risen 2.76% in extended trading on Monday after the filing.
Nvidia's filing, released on Monday, showed beneficial ownership of approximately 22.26 million shares, including shares from a pre-funded warrant with an exercise price of $0.0001. Only about 1.2 million shares are common stock held outright. Under regulatory rules, Nvidia cannot exercise the warrant or sell the underlying shares before September 11, 2026, signaling a passive investment intent rather than an attempt to control the company.
Nvidia had previously announced a $2 billion investment in Nebius in March 2026. The current value of Nvidia's stake is estimated at about $5 billion. This follows a pattern of Nvidia's investments in AI infrastructure, including $2 billion in Marvell Technology, $30 billion in OpenAI, and participation in Anthropic's $30 billion fundraise, as well as stakes in CoreWeave, Coherent, and Lumentum. Goldman Sachs has flagged 'the increasing circularity of the AI ecosystem.'
Estimated value of Nvidia's beneficial ownership stake in Nebius.
Analysts have responded positively. Baird initiated coverage with an Outperform rating, citing AI inference positioning. Freedom Capital Markets upgraded Nebius to a buy rating, calling the debt raise a 'positive catalyst.' Citi analysts have a buy rating and $287 price target, while Northland Capital Markets initiated with an Outperform rating and $410 target. The consensus rating is 'Moderate Buy' with a mean price target of about $238. Analyst Paul Meeks upgraded Nebius to Buy with a $200 price target, citing improved risk-reward after the stock fell 40% from its June high.
Nebius has been expanding aggressively. The company aims to reach at least 5 gigawatts of total computing capacity by the end of 2030. It signed a long-term agreement with Meta for up to $27 billion in AI infrastructure, a $17 billion deal with Microsoft, and a $1 billion-plus compute agreement with Reflection AI. Nebius raised $775 million in its first senior secured debt facility and ended Q1 with $9.3 billion in cash and cash equivalents after raising $4.3 billion through convertible senior notes.
They are growing incredibly fast
Nebius reported Q1 2026 revenue of $399 million, up 684% year over year, with its core AI business revenue soaring 841% to $390 million. Adjusted EBITDA was $129.5 million with a 32% margin, while the core AI business expanded its margin to 45%. However, the company reported an adjusted net loss of $100.3 million, widening 20% year over year. Nebius projected full-year 2026 revenue of $3.0 billion to $3.4 billion and lifted its capex forecast to $20 billion to $25 billion.
The stock has been volatile. It reached a high of nearly $300 in June before falling about 40% to around $182, then rebounding on the Nvidia news. Despite Tuesday's jump, the stock remains about 28% below its record high of $299.86. Nebius shares are up 160% year to date and have quadrupled over the past 12 months. Short interest stands at about 61 million shares, approximately 24% of the float.
Hedge funds have increased exposure, with 60 funds holding positions at the end of Q1, up from 54, and total value more than doubling to $2.36 billion. Orbis Investment Management increased its position by 150%, and Value Aligned Research Advisors by 76%. Two Sigma Advisors opened a new position in Q1.