Wall Street Says Nebius Group ARR Can 10X in 4 Years
Wolfe Research projects Nebius Group's ARR to grow nearly 10x by 2030, rising from $4 billion to $41 billion through its 5 GW contracted power pipeline.
Microsoft and Meta signed deals potentially worth $17 billion and $27 billion respectively, with customer prepayments covering between 50 and 60 percent of Nebius's buildout costs.
Nebius posted a 50% Q2 AI cloud EBITDA margin, but sustaining those returns while deploying 1+ GW annually from 2027 is the pivotal test.
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The AI infrastructure boom is moving into a new phase. Demand for computing power is no longer the only constraint; access to electricity, data-center capacity, and financing are becoming just as important. Customers are committing billions of dollars years ahead of delivery, while scarce power supports pricing. For investors, contracted power is becoming a financial asset as much as an operating metric.
Wolfe Research believes Nebius Group (NASDAQ:NBIS) can exit 2030 with more than $41 billion of annual recurring revenue (ARR) -- nearly 10 times the $4.26 billion ARR shown for the third quarter of 2026 in its model. The thesis is aggressive, but its building blocks are visible.
Nebius just raised its year-end 2026 contracted-power target to 5 gigawatts, up from more than 4 GW. Management said it plans to deploy more than 1 GW annually beginning in 2027, and Reuters reported that the company believes it can sell its 2027 capacity at current terms.
The Wolfe model translates that power ramp into ARR growth: $6.3 billion in fiscal 2026, $13.9 billion in 2027, $22.8 billion in 2028, $31.8 billion in 2029, and $41.2 billion in 2030. That assumes Nebius can repeatedly convert electricity into revenue-producing capacity.
Forget the chips—the real AI war is being fought over electricity. With billions in upfront payments from tech titans, the race to turn raw power into revenue has officially reached a fever pitch. © 24/7 Wall St.
Nebius' Q2 2026 shareholder letter said annual contract value per megawatt had climbed above $20 million for Q2 deals and above $40 million for short-term Q3 capacity deals. Four deals averaged more than $1 billion each, while 50% to 60% of their capex was self-financed through customer prepayments.
Nebius' 2025 annual report provides an example. Microsoft's (NASDAQ:MSFT) agreement can generate as much as $17.4 billion through 2031 and includes roughly $7 billion of upfront payments. Meta Platforms' (NASDAQ:META) March agreement carried a potential contract value of about $27 billion.
That reduces Nebius' financing burden while long-duration contracts provide revenue visibility.
Admittedly, contracted power is not completed infrastructure. Nebius spent about $5.7 billion on capital expenditures in Q2 alone, according to its shareholder letter, while 2026 revenue guidance remains $3 billion to $3.4 billion.
The company also faces competition from Nvidia (NASDAQ:NVDA)-powered cloud providers such as CoreWeave (NASDAQ:CRWV). Nebius must turn scarce power into energized capacity quickly enough to preserve returns.
Surprisingly, its Q2 AI cloud adjusted EBITDA margin reached 50%. That gives the model some credibility, but sustaining those economics while adding more than 1 GW annually will be the key test.
In short, Wolfe's $41 billion ARR forecast is a high bar, but the math has a foundation. Nebius must convert 5 GW of contracted power into capacity, maintain pricing above $20 million per MW, and keep using customer prepayments to fund growth.
For investors, Nebius is a high-risk, high-upside AI infrastructure bet. The 10x ARR opportunity is worth watching, but the real signal will be whether margins hold as the gigawatts come online.
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