Nebius (NASDAQ: NBIS) has been steadily raising its capacity guidance for the end of 2026. The company told investors in February that it expected to have 3 gigawatts of contracted power by the end of 2026. That number jumped to 4 gigawatts in May, and when the company released second-quarter results in August, it told investors to expect 5 gigawatts by the end of the year.
This steady growth comes as the company adds new sites throughout North America and Europe. It also suggests that the stock's rally isn't close to over, even though its price has almost tripled year to date. This Rare Signal Is Flashing Again.
In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue » Nebius operates in one of the hottest industries right now.
It's the largest of the neocloud providers -- a group of companies that's playing a critical role in the artificial intelligence (AI) boom. Tech giants like Meta Platforms (NASDAQ: META) and Microsoft (NASDAQ: MSFT) have already turned to Nebius to help them meet their AI capacity needs. Meta Platforms has made multiple cloud compute deals this year, in addition to one last year.
Its biggest deal came in at $27 billion over the next five years. It's split between a five-year, $12 billion agreement and a second five-year, $15 billion deal. Nebius says it will start to deliver this capacity in early 2027.
It's normal for tech giants to secure hundreds of megawatts in a single deal, and Nebius anticipates having roughly 5 gigawatts of contracted power by the end of 2026. (1 gigawatt equals 1,000 megawatts.) It's entirely possible that Nebius will raise its contracted power capacity guidance again before the end of the year, based on its history. The ceiling for Nebius' potential revenue will get higher as it secures more megawatts and builds additional data centers. That potential for the business to scale up has been showing up in its recent results.
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