Rosenblatt initiated coverage of Nebius with a Buy rating and a $304 price target, arguing that the company sits near the top of the neocloud group. The target is an analyst estimate, not a company forecast. Investors should focus on the operating assumptions that must be true for the valuation to work.
Capacity has to become billable revenue
Nebius ended 2025 with annualized run-rate revenue of $1.25 billion and about 170 megawatts of active power. The company later reported rapid growth, positive adjusted EBITDA in its core AI cloud business and a larger contracted-power pipeline. Those metrics show demand, but contracted power is not the same as connected, revenue-generating capacity.
Rosenblatt's case assumes extraordinary revenue growth through 2030. Delivering it requires data centers to open on schedule, GPUs to arrive, customers to begin using capacity and uptime to meet service obligations. Delays in any step can shift revenue while interest and construction costs continue.
Funding is part of the equity story
Nebius has raised billions through convertible notes and other financing to support expansion. Convertible debt can reduce near-term cash interest compared with straight debt, but it can dilute shareholders if converted. Additional equity or debt would make the growth plan more secure while also changing per-share value.
The company is also trying to improve capital efficiency. Its infrastructure-partner model lets third parties own facilities while Nebius supplies architecture, software and customer access. If adopted at scale, that model could add capacity without Nebius funding every building and server itself.
What investors should watch
Track active power, connected power, customer prepayments, capital spending and diluted shares. Revenue growth should be compared with free cash flow, not only adjusted EBITDA. The next quarterly report also needs to show whether large contracts are diversifying the customer base or increasing concentration.
BTI's bottom line
The bullish rating reflects a credible demand and capacity story. The decisive test is whether Nebius can turn megawatts and contracts into durable free cash flow before financing costs and dilution absorb too much of the upside.