AI Stocks Volatility and Growth Potential Amid Capital Expense Concerns
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Feb 19 2026
0mins
Should l Buy NBIS?
Source: Fool
- Market Volatility Reasons: AI stocks have recently experienced volatility due to significant capital expenditures by tech giants, raising concerns about a potential bubble while also highlighting the disruptive impact this technology could have on the software and services sectors.
- Nebius Growth Potential: Nebius Group reported a nearly sixfold revenue increase to $530 million in Q4 2025, with expectations of annualized revenue reaching between $7 billion and $9 billion by the end of 2026, indicating strong market demand and expansion plans.
- Twilio's AI Applications: Twilio's Voice AI solution achieved a 60% year-over-year revenue growth in Q4 2025, with a 24% increase in its customer base, demonstrating the effectiveness of AI tools in enhancing customer interactions and driving sales.
- Investment Value Assessment: Although Nebius has a price-to-sales ratio of 59, its robust growth and revenue backlog make it attractive in the market, while Twilio's price-to-earnings ratio of 20 is below the Nasdaq average, indicating significant investment potential.
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Analyst Views on NBIS
Wall Street analysts forecast NBIS stock price to rise
5 Analyst Rating
5 Buy
0 Hold
0 Sell
Strong Buy
Current: 94.940
Low
130.00
Averages
164.20
High
211.00
Current: 94.940
Low
130.00
Averages
164.20
High
211.00
About NBIS
Nebius Group NV is a Netherlands-based infrastructure company operating in the technology industry. The Company is engaged in developing a portfolio of artificial intelligence-related technology assets. It is involved in creating an artificial intelligence-centric player to integrate the essential elements of artificial intelligence development with infrastructure, data and advisory globally. It offers products and services such as a cloud platform for artificial intelligence-related workloads, development team services for autonomous vehicles, development of generative artificial intelligence. Nebius builds full-stack infrastructure to service the growth of the global AI industry, including GPU clusters, cloud platforms and tools and services for developers. Company is developing three other businesses that operate under their own brands: Toloka AI, TripleTen and Avride.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Asia-Pacific Expansion: Nebius announced its expansion into the Asia-Pacific region to leverage the area's growth potential, which is expected to significantly enhance its market share and revenue growth.
- Executive Appointment: The company appointed John Haarer as the new general manager for the Asia-Pacific and Japan region, whose successful experience at Cloudflare and Twilio will aid Nebius in penetrating the market.
- Revenue Growth Outlook: Nebius anticipates an annualized revenue run rate of $7 billion to $9 billion by the end of 2026, reflecting its strong growth potential in the AI infrastructure sector.
- Data Center Development: Nebius plans to establish 16 global data center sites by the end of 2026, recently receiving approval to develop a 1.2 GW AI factory in Missouri, further enhancing its competitiveness in the U.S. market.
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Power Capacity and Infrastructure: The facility will have a power capacity of up to 1.2 gigawatts, positioning Nebius as a key player in the AI infrastructure market, crucial for meeting the growing demand for AI computing power.
Strategic Transformation: The company is transitioning from a diversified tech conglomerate to a focused AI infrastructure provider, emphasizing its commitment to capturing significant market opportunities in the AI sector.
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- Factory Approval: The company announced it received approval from the City Council of Independence, Missouri, to begin construction on its largest gigawatt-scale AI factory, which will significantly enhance its capabilities in AI processing services.
- Significant Revenue Growth: Nebius reported a revenue of $530 million in 2025, marking a 479% increase, although the company remains unprofitable with an adjusted loss of $447 million, highlighting the financial challenges amid rapid expansion.
- High-Risk Investment: Despite showing strong growth potential, Nebius has a market cap of $22 billion and a price-to-sales ratio of 41, suggesting that investors should approach this high-risk stock with caution, making it suitable for those with a high-risk tolerance as part of a balanced portfolio.
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- Asia-Pacific Expansion: Nebius announced its expansion into the Asia-Pacific region to leverage the area's growth potential, which is expected to significantly enhance its market share and revenue growth.
- Executive Appointment: The company appointed John Haarer as the new general manager for the Asia-Pacific and Japan region, whose successful experience at Cloudflare and Twilio will aid Nebius in penetrating the market.
- Revenue Growth Outlook: Nebius anticipates an annualized revenue run rate of $7 billion to $9 billion by the end of 2026, reflecting its strong growth potential in the AI infrastructure sector.
- Data Center Development: Nebius plans to establish 16 global data center sites by the end of 2026, recently receiving approval to develop a 1.2 GW AI factory in Missouri, further enhancing its competitiveness in the U.S. market.
See More
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- Market Concerns Rise: Investors are increasingly nervous about AI investments due to the massive capital being allocated for computing infrastructure, especially since it may take years to assess the effectiveness of these investments.
- Customer Dependency Analysis: CoreWeave is projected to derive 67% of its revenue from a single major customer in 2025, widely believed to be Microsoft, indicating a stable customer base and potential for sustained growth.
- Revenue Growth Expectations: Analysts forecast Nebius's revenue to grow by 532% and 181% in 2026 and 2027, respectively, while CoreWeave is expected to grow at 142% and 85%, highlighting the fierce competition in AI infrastructure development.
- Profitability Comparison: Although neither company is currently profitable, CoreWeave's operating margin suggests it is closer to breakeven, and its lower relative valuation indicates a more attractive value proposition in the market.
See More
US Department of War Denies Negotiations with Anthropic AI
- Government Denial: The US Department of War has refuted any ongoing negotiations with AI startup Anthropic, which plans to challenge the government's designation of it as a national security 'supply chain risk,' potentially impacting its funding and market confidence.
- Congressional Scrutiny on China: Congressman John Moolenar urged the Treasury Secretary to exercise 'heightened scrutiny' of inbound investments from China, which could lead to stricter restrictions on Chinese businesses seeking market access in critical manufacturing sectors in the US, affecting US-China economic relations.
- Trump Administration's New Framework: The Trump administration is reportedly considering a new framework that would require foreign governments to invest in US data centers when exporting advanced AI chips, which could alter the dynamics of the global technology supply chain and impact international competition.
- Amazon Job Cuts: Amazon has reportedly cut additional jobs in its robotics division, reflecting structural adjustments as the company faces market challenges, which may affect its future innovation capabilities and competitive position.
See More
Nebius Secures 1.2 GW Deal: A $20 Billion Investment in AI Infrastructure
Nebius Group's AI Factory: Nebius Group has secured approval to build a massive AI factory in Missouri, which will serve as a hub for AI innovation and is expected to create over 1,300 local jobs.
Power Capacity and Infrastructure: The facility will have a power capacity of up to 1.2 gigawatts, positioning Nebius as a key player in the AI infrastructure market, crucial for meeting the growing demand for AI computing power.
Strategic Transformation: The company is transitioning from a diversified tech conglomerate to a focused AI infrastructure provider, emphasizing its commitment to capturing significant market opportunities in the AI sector.
Financial Growth Projections: Nebius aims for an annual revenue run rate of $7 billion to $9 billion by the end of 2026, supported by a well-structured funding strategy and secured customer demand, indicating strong potential for financial growth.
See More
Major U.S. Indexes Rise as Investor Concerns Ease Over Iran Conflict
- Broadcom Earnings Beat: Broadcom's Q1 revenue reached $19.31 billion, exceeding analyst expectations of $19.20 billion, with adjusted earnings of $2.05 per share surpassing the $2.02 forecast, driven by significant growth in AI revenue, resulting in a 1.18% stock increase to $317.53.
- Rigetti's Disappointing Report: Rigetti Computing reported a Q4 loss of $0.03 per share, in line with expectations, but revenue of $1.87 million fell short of the $2.34 million estimate, leading to a 4.3% decline in after-hours trading to $16.99, highlighting ongoing challenges for the company.
- Nebius Expansion Plans: Nebius Group's stock surged 12.65% to $97.78 after the Independence City Council approved plans for a 400-acre AI factory, expected to create about 1,200 construction jobs and 130 permanent roles, generating over $650 million in tax payments over 20 years.
- IREN Benefits from Bitcoin Rally: IREN Ltd's shares rose 12.84% to $43.84 as Bitcoin rebounded approximately 7% to $73,200, enhancing operational leverage and miner economics, although the stock fell 4.79% to $41.74 in after-hours trading.
See More
Nebius Group Secures Approval for AI Factory Construction
- Stock Surge: Nebius Group's stock surged as much as 10.3% today, with a 9.9% increase still noted at 11:37 a.m. ET, indicating strong market optimism regarding the company's future developments.
- Factory Approval: The company announced it received approval from the City Council of Independence, Missouri, to begin construction on its largest gigawatt-scale AI factory, which will significantly enhance its capabilities in AI processing services.
- Significant Revenue Growth: Nebius reported a revenue of $530 million in 2025, marking a 479% increase, although the company remains unprofitable with an adjusted loss of $447 million, highlighting the financial challenges amid rapid expansion.
- High-Risk Investment: Despite showing strong growth potential, Nebius has a market cap of $22 billion and a price-to-sales ratio of 41, suggesting that investors should approach this high-risk stock with caution, making it suitable for those with a high-risk tolerance as part of a balanced portfolio.
See More
