Nebius Group (NBIS) Valuation: Market Mispricing Despite Strong Fundamentals and Growth

Nebius Group N.V. (NBIS) is currently facing market mispricing as investors treat it as a proxy for other AI infrastructure firms. However, the company's fundamentals suggest significant undervaluation, with its capacity already fully sold out through the first quarter of 2026. Nebius maintains a robust financial structure, holding $8.5 billion in convertible debt at a blended coupon rate of less than 2%. Furthermore, approximately 60% of its capital expenditure (CapEx) is self-funded through cash reserves, operational cash flow, and customer prepayments. Despite a temporary revenue miss in the fourth quarter, the company shows strong indicators of growth in annual recurring revenue (ARR). This self-funded growth model and high contract visibility position NBIS for potential long-term outperformance relative to its current market valuation.

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