Key Points
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Nebius's stock could double by 2030 if the company remains on its current growth trajectory.
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Neocloud providers could take 20% of the $267 billion AI cloud market by 2030.
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Potential investors should keep an eye on the company's accelerating spending.
The artificial intelligence (AI) cloud company Nebius(NASDAQ: NBIS) has gone on a fantastic run over the past 12 months, with its share price soaring 110%. Demand for neocloud companies that rent out data center capacity to tech companies is accelerating, and Nebius is tapping straight into that need.
The trajectory for many AI stocks looks good right now, but where will Nebius be in a few years, and how much might $1,000 invested in the company be worth?
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On the bullish side, I think Nebius' shares could double from their current price, turning $1,000 into $2,000 by 2030. Here's why.
The neoclouds are having their day in the sun
The need for data center capacity for AI has accelerated over the past several years, spurring growth in neoclouds that run compute-as-a-service businesses.
While traditional hyperscalers like Alphabet, Microsoft, and Amazon have their own data centers and cloud services, neoclouds simply rent out compute capacity. This makes companies like Nebius especially critical for tech companies looking to accelerate their AI capacity quickly.
And that's done wonders for Nebius' cloud contracts. The company signed four contracts in the second quarter, each averaging more than $1 billion. And Nebius recently announced a five-year agreement with Meta worth at least $12 billion, with the potential to rise to $15 billion. Palantir also named Nebius as one of its preferred AI infrastructure partners, giving Palantir's customers access to Nebius' infrastructure.
The total amount of Nebius' backlog commitments exceeds $40 billion. Though it's worth mentioning that this hasn't been realized as revenue yet. Still, Nebius' total sales outlook for 2026 is for about $3.2 billion -- more than double its 2025 revenue.
Nebius is building new data centers to meet demand and has said it will have 16 by the end of this year. Nebius is trying to keep up with its customers' needs, and CFO Dado Alonso said on the second-quarter earnings call,
"[O]nce again, we sold out of capacity because, as fast as we bring capacity online, we can sell it."
That's a very good problem to have, and it could keep Nebius' sales accelerating for years to come. Research firm Gartner estimates that neocloud providers could take 20% of the $267 billion AI cloud market by 2030.
One factor that could keep Nebius stock from accelerating
There's one issue that tech investors are starting to side-eye: rising capital expenditures paired with no profits.
Unfortunately, that explains Nebius. Management says capex will be around $22.5 billion this year, at the midpoint of guidance, which is more than 5 times last year's level. That's quite a spending spree, especially when sales are only expected to be just over $3 billion this year.
You don't have to look hard to find AI stocks that are suffering under the weight of their spending. Space Exploration Technologies' capex rose 309% to $28.5 billion in the first half of this year, with most of it directed toward artificial intelligence. Meanwhile, its total sales over the same period were less than half that.
SpaceX's shares are still around their opening trading price from back in June, as investors have questioned whether the spending will eventually translate into profits.
Nebius is a different company from SpaceX, but both rent out AI cloud computing to customers and are spending money freely.
Nebius appears to be on the right track to capitalize on the growing demand for neocloud computing capacity. But if its sales don't start closing the gap to its spending, and if profits don't come fast enough, investors may start cooling on this red-hot AI stock.
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Chris Neiger has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet, Amazon, Meta Platforms, Microsoft, and Palantir Technologies. The Motley Fool recommends Gartner. The Motley Fool has a disclosure policy.