Nebius just put up a monster quarter. The Amsterdam-based company said second-quarter cloud sales jumped 514% from a year earlier, powered by strong demand for AI computing power.
The AI cloud business brought in $575 million of the company's $582 million in total revenue. Bloomberg's consensus of analyst estimates had put the expected total at roughly $557 million.
CEO Arkady Volozh kept his comments short in Wednesday's statement. "Everything we set out to do this quarter, we did," he said. "In most cases, we did more."
The pipeline looks stronger than the quarter itself. Nebius said the total value of contracts signed in the second quarter was four times the prior quarter's total, including four agreements that each averaged more than $1 billion.
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That kind of demand explains why the company is spending so freely. Nebius spent about $5.7 billion on chips, equipment, and data-center expansion during the quarter.
In July, Nebius obtained $775 million in asset-backed financing, with GPUs among the collateral.
These investments are not without risk. The neocloud market is highly competitive, and the capital expenditures required to stay at the forefront of AI hardware are immense. Nebius has chosen to finance part of its expansion through asset-backed loans, using its own GPUs as collateral. That approach can provide quick funding but also exposes the company to potential losses if the value of that equipment declines or if demand fails to materialize.
The company is part of a group of providers known as neoclouds, which rent out data-center computing capacity for AI workloads. Nebius was formed in 2024 through a separation from Yandex, the Russian internet company, and now works with Nvidia, Microsoft, and Meta. On Tuesday, rival CoreWeave projected third-quarter sales above analyst expectations.
Nebius operates in a fast-growing niche of the data-center industry. Unlike traditional hyperscalers, neoclouds focus exclusively on renting out high-performance computing clusters tailored for AI training and inference.
Since then, it has rapidly scaled its infrastructure, betting that the demand for AI compute will remain strong for years to come.
The neocloud trade is still hot, but it comes with real risk. These companies are spending billions today on equipment. That is why Nebius shares are so volatile, up 131% for the year before this week's jump.
What makes this notable is that the revenue is actually showing up. The company surpassed analyst expectations, and the size of those new contracts signals strong demand for AI computing power.
For investors, the takeaway is simple. The companies selling AI computing capacity are still seeing enormous demand, and they are willing to secure financing to chase it. Whether that bet pays off will depend on whether the AI buildout keeps growing or finally hits a wall.
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