NBIS shares surged in Tuesday’s premarket, climbing 6.61% to $194.70 after Nvidia disclosed an increased stake in Nebius Group, the AI cloud computing firm. This follows a 2.76% rise at Monday’s close, signaling growing investor confidence fueled by strategic moves from a major tech player.

Nvidia's Strategic Expansion in AI Cloud Infrastructure

The tech giant Nvidia filed a Schedule 13G revealing its passive ownership of 22.25 million Class A shares in Nebius, translating to a 9.3% stake. This is a significant step up from the 8.3% stake Nvidia held since its $2 billion commitment in March. only 1.19 million shares are directly owned, while the remaining 21.07 million are tied to pre-funded warrants exercisable after September 11, 2026.

This move reflects Nvidia’s commitment to deepening its footprint in AI infrastructure, a sector expected to underpin future cloud computing growth. The warrants indicate a potential for further capital infusion, reinforcing Nvidia’s long-term interest without immediate dilution.

Market sentiment responded swiftly. NBIS stock has appreciated nearly 9% since Friday, still below its June highs. The rally also prompted Freedom Capital to upgrade Nebius from "Hold" to "Buy," raising its price target from $159 to $200, implying over 9% upside from Monday’s close. The firm’s valuation applies a 4X-6X EV/EBITDA multiple based on a striking 41X revenue growth forecast through 2028.

Adding to the bullish outlook, Nebius recently secured $775 million in senior secured debt to expand its AI infrastructure globally. This financing is backed by GPU deployments and stable cash flows from investment-grade clients, enabling Nebius to use potential obligations exceeding $40 billion. Such capital structure strengthens Nebius’s capacity to scale rapidly amid intensifying competition in AI cloud services.

Interest from other institutional investors like Situational Awareness, an AI-focused hedge fund holding 5.6%, shows the growing ecosystem rallying behind Nebius. Nvidia’s enhanced stake is more than a financial investment; it signals validation of Nebius’s technology and market positioning as AI-driven cloud infrastructure becomes increasingly critical.

This material is informational and not financial advice.