Nebius Group (NASDAQ:NBIS | NBIS Price Prediction) is forecasting up to 1,600% revenue growth by the end of 2026, driven by surging demand for AI compute infrastructure. The company projects an annualized run rate in revenue of $900 million to $1.1 billion for the end of 2025 and $7 billion to $9 billion by the end of 2026, as it scales to meet hyperscaler needs.
Nebius has secured major contracts, including a multi-year deal with Microsoft (NASDAQ:MSFT) valued at over $19 billion and a $3 billion partnership with Meta Platforms (NASDAQ:META) over five years. It is also expanding capacity from 220 megawatts (MW) to 800 MW and up to 1 gigawatt (GW) of connected power by the end of 2026, with contracted power reaching 2.5 GW.
Despite this, some investors remain hesitant about buying the stock, but Nvidia (NASDAQ:NVDA) CEO Jensen Huang just provided another reason why you Nebius Group should be at the top of your buy list.
The Latest Gen AI Chip Supply Crunch
Supply of the latest generation of artificial intelligence (AI) chips remains sold out into 2026, making it difficult for companies to acquire new inventory promptly. Nvidia’s H200 chips, for instance, have seen Chinese firms place orders for over 2 million units for 2026, exceeding the company’s current stock of 700,000. This shortage stems from explosive demand for AI training and inference, which is outpacing production increases at foundries like Taiwan Semiconductor Manufacturing (NYSE:TSM). As a result, providers are negotiating additional output, with work set to begin in the second quarter of 2026. High-bandwidth memory, essential for these chips, is also constrained, with data centers projected to consume 70% of global production in 2026.
This scarcity has forced companies to rent older-generation chips to bridge the gap. Two-generation-old GPUs, such as those from Nvidia’s Hopper series, are seeing increased utilization as users await further Blackwell and Rubin deployments. Providers like Amazon‘s (NASDAQ:AMZN) AWS have raised GPU instance prices by 15% in early 2026, reflecting the tight market. Benchmarks show spot rates for H100 equivalents stabilizing at $2.27 per hour in mid-January, up from December lows. Regional variations have pushed rates in Europe to $2.80 to $3.20 per hour.
Huang’s Bright Outlook for Older Chips
At the World Economic Forum in Davos, Huang addressed AI bubble concerns by highlighting rising spot prices for GPU rentals. He stated: “If you try to rent an Nvidia GPU these days, it’s so incredibly hard, and the spot price of GPU rentals is going up, not just the latest generation, but two-generation-old GPUs.”
Huang attributed this to real demand from new AI startups and companies reallocating R&D budgets, describing it as evidence of the “largest infrastructure buildout in human history.” This trend counters the 60% to 75% price declines seen in 2025, indicating at least a short-term rebound as delays and energy constraints limit the availability of Blackwell chips.
Nebius Group’s Direct Line to Profits
Rising spot prices directly benefit Nebius by enabling higher per-hour charges on its GPU rentals, boosting revenue and margins. With 20% power efficiency advantages over peers and sold-out capacity, Nebius can adjust pricing dynamically during shortages. Its $19.4 billion Microsoft deal and $3 billion Meta contract provide stable baselines, supplemented by spot-market upside.
Analysts project a 15% to 25% short-term revenue uplift, pushing growth over the next 12 months to 339% and potentially $4 billion-plus in annualized run rate if prices hold. Nebius’s early adoption of Nvidia’s Vera Rubin platform in the second half of 2026 further positions it to capture premium demand.
Key Takeaway
Nebius isn’t the only beneficiary of this trend. IREN (NASDAQ:IREN) and Cipher Mining (NASDAQ:CIFR) also gain from rising GPU spot prices through their pivots to AI infrastructure. IREN’s own $9.7 billion Microsoft deal and 60,000 GPU target for 2026 enable 20% to 30% revenue increases due to dynamic pricing, with 117% growth projected for the next year.
CIFR’s deals with Alphabet and Amazon — totaling over $8.5 billion — support 10% to 20% increases from premium leases, with growth projected at 149%. But if you still needed a reason to commit to buying Nebius stock, Jensen Huang just gave you one.
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