Nebius Group: Update Of My Nebius AI's Operating Metrics Forecast And Valuation

Nebius Group's stock has seen a decline of 21% since my last analysis. However, the company has announced several developments that could positively influence its future performance.

Forecast Changes

I have made updates to my forecasts regarding Nebius's operating metrics. These updates have led to an increase in projected capital expenditures, which are now estimated at $5.05 billion for 2025 and $4.49 billion for 2026. Additionally, I have raised my revenue projections to approximately $845 million in 2025 and $3.02 billion in 2026. These figures reflect optimism about the company's growth.

Financing Options

Despite the increased capital spending requirements, Nebius AI is in a solid position when it comes to financing. The company has flexible options, including the potential for treasury share sales, and convertible debt issuances, as well as the possibility of selling stakes in its subsidiary, Avride. These measures should provide sufficient funding for its operations and growth.

Valuation Update

With the revised forecasts for Nebius AI's operating metrics, I also updated my fair value estimate for Nebius Group's stock. The new estimate stands at $43.90 per share, suggesting that I remain confident in the value and potential of the company's shares, despite the stock's recent decline.

Conclusion

Overall, while the decline in Nebius's stock price may concern some investors, the positive developments and the upward revisions to forecasts indicate that the company is on a promising path. I believe the stock's current value presents a good opportunity for investors looking for growth in the technology sector.

Disclaimer: This article represents my personal views and opinions. I hold a beneficial long position in Nebius shares. It is important to conduct your own research before making any investment decisions.

Nebius, Forecast, Valuation