Nebius shares rise after a strong quarter: what is supporting the AI provider’s business

Shares of cloud AI provider Nebius Group (NBIS) gained nearly 4% after the release of quarterly results. The company called the past period the best commercial quarter in its history, and investors responded positively to business growth amid sustained demand for computing infrastructure for artificial intelligence.

Why Nebius shares are rising

According to Freedom analyst Natalia Milchakova, the price increase is linked not so much to the mere fact of the earnings release as to investors’ positive expectations regarding the company’s further development.

One supporting factor is Nebius’s business model: the company receives about 70% of its revenue via prepayments. This increases the predictability of cash inflows and enables funding for further infrastructure expansion.

Another important metric is EBITDA margin. High profitability indicates that rising demand for computing capacity can translate not only into higher revenue but also into improved operating results for the company.

AI demand supports Nebius’s outlook

Nebius operates in the fast-growing AI infrastructure market, providing companies with cloud computing capacity to develop and run artificial intelligence models. Sustained high demand for AI in the coming years could enable further business expansion and support the value of its shares.

At the same time, one of the main risks remains intense competition. The cloud AI infrastructure market is attracting significant investment, and both specialized providers and the largest technology corporations are competing for customers and computing workloads.

According to Freedom analyst Natalia Milchakova, if high demand for AI persists, Nebius shares may have significant upside potential. However, realizing it will depend on the company’s ability to maintain high profitability and strengthen its position amid intensifying competition.

Vantage prepares for a $100 billion IPO, Millrose gets a new growth driver

Amid the boom in investment in artificial intelligence, interest continues to grow in companies that provide the infrastructure it requires. Vantage Data Centers is considering an IPO at a valuation of about $100 billion, potentially raising around $10 billion. The company operates more than 2 GW of power capacity and about 20 million sq. ft. of data-center space across 19 markets. Demand for such infrastructure is growing along with AI development, as training and running large models require ever more computing power.

In the real estate sector, Freedom maintained its “Buy” rating on Millrose Properties (MRP) with a $35 target price and upside potential of about 17.6%. In the second quarter, Millrose revenue increased 32.1% year over year to $196.9 million, while AFFO rose 10.9% to $127.6 million. Analysts also see the company’s entry into the multifamily housing segment as an additional driver.

Among other corporate events: on August 13 Accelerant Holdings (ARX) agreed to be sold to Thoma Bravo for more than $4 billion. Shareholders will receive $20.25 per share — a 49% premium to the August 12 closing price. After the deal closes, expected in the first half of 2027, the insurance technology company will stop trading on the NYSE.

At the same time, Dillard's (DDS) reported second-quarter results below market expectations. Adjusted earnings came in at $3.87 per share versus a $4.32 forecast, and revenue fell 0.4% to $1.51 billion, compared with expectations of $1.53 billion. Comparable sales increased by 1%.

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