Citi Maintains Buy Rating on Nebius with $278 Target Price

Citi cites strong Q2 revenue and pre-funded capex for Nebius, maintaining a Buy/High Risk rating. The bank highlights deployment pace as the key bottleneck for realizing contracted capacity.

Woofun AI reports that Citi has retained its 'Buy/High Risk' rating for Nebius, setting a price target of $278. The bank identifies capacity deployment speed, rather than demand, as the primary growth constraint. Nebius recorded robust second-quarter revenue fueled by asset SLA income, Token Factory operations, Tavily services, and elevated utilization rates. Management confirmed persistent market demand, noting multiple buyers per GPU and expanding order backlogs driven by larger average order sizes and extended contracts in its core AI cloud segment.

Citi highlighted that 50%-60% of infrastructure capital expenditures are covered by upfront customer payments, reducing project payback periods to approximately 10 months and mitigating funding concerns. While most contracted capacity is scheduled for deployment in the second half of 2026, revenue recognition may lag due to network testing and integration requirements. The firm maintains that the $7 billion to $9 billion annual recurring revenue goal relies on utilization and pricing dynamics rather than single projects, with 5GW of capacity expected online over the next two to three years. Risks cited include customer concentration, high capital intensity, and GPU supply uncertainties.