Nebius Group said it delivered nearly an eightfold increase in revenue for the quarter ended March, a result of rising demand for artificial intelligence infrastructure and cloud services that propelled the company's shares higher in early trading.
The Amsterdam-based neocloud operator reported revenue of $399 million for the three months ended March, up from $50.9 million a year earlier, outpacing an LSEG-compiled estimate of $371.4 million. Shares rose about 14% in early trading on the news.
Management said the surge in demand has left available capacity tight - and that the company is moving to secure both computing capacity and electrical power to support growth. Nebius raised its annual capital expenditure forecast to a range of $20 billion to $25 billion, up from a prior projection of $16 billion to $20 billion.
Executives pointed to large customers, including Meta and Microsoft, and described Nebius as capturing a portion of the growing AI and cloud infrastructure market by supplying Nvidia GPUs and developer computing platforms. The company said demand continues to exceed capacity and it expects to expand funding for its build-out through asset-backed financing and corporate debt while maintaining a focus on cost control.
On margins, analysts noted potential pressure arising from the company's heavy capital spending even as top-line growth remains strong. CEO Arkady Volozh acknowledged intense competition for hardware capacity, saying, "We typically see several customers competing for every GPU we bring online," and added that the increased spending reflects visibility into 2027 demand rather than immediate cost pressures.
Capital investments were substantial in the first quarter: Nebius reported capex of roughly $2.5 billion, compared with $544 million in the year-earlier period, driven largely by purchases of graphics processing units and data center equipment.
The company is expanding its AI infrastructure footprint both organically and via acquisitions. As part of that strategy, Nebius agreed to acquire startup Eigen AI for about $643 million and has signed a long-term arrangement with Meta to supply up to $27 billion of computing capacity over five years.
Operationally, Nebius announced a new site in Pennsylvania that is planned to support 1.2 GW of power once fully operational. The firm now expects to have more than 4 GW of contracted power by year-end, revised up from a prior forecast of more than 3 GW.
Implications
The company's results highlight a booming market for AI compute and the capital intensity required to compete. Nebius' higher capex guidance and large multi-year contracts signal strong demand visibility, but also underline the financing and margin challenges that come with rapid infrastructure scaling.