BlockBeats News, August 13, Citigroup stated in its latest report that the current growth bottleneck for Nebius is not demand but rather the pace of capacity deployment. The bank maintains a "Buy/High-Risk" rating on Nebius with a target price of $278.

The report stated that Nebius had a strong second-quarter revenue, driven by Asset SLA Revenue, Token Factory, Tavily, higher utilization rates, and on-demand requests. Management indicated that market demand remains very strong, with multiple buyers behind each GPU and order backlog growth coming from larger average order sizes in the core AI cloud business and increased mid-term contracts.

In recent US stock AI trading, neoclouds are becoming a new focus. Following Nvidia's $500 billion AI infrastructure financing plan, CoreWeave's financial report, and Lumentum's strong guidance, the market is starting to look at who can obtain GPUs, who can finance construction, and who can convert computing power into revenue.

Citigroup specifically mentioned that around 50%-60% of Nebius' infrastructure capex is supported by upfront customer payments. From a cash flow perspective, the project payback period could be less than a year, around 10 months. This helps alleviate market concerns about funding pressure on the neocloud model.

The real test will come in the second half of the year. Nebius expects that most of the contracted capacity will come online in the second half of 2026, and Microsoft-related deployments will follow a similar pace. The 800MW to 1GW connected power target remains achievable, but conversion to active power will still require network testing, integration, and debugging, leading to delayed revenue recognition.

Management also stated that the $7 billion to $9 billion ARR framework does not rely on a single project but is jointly driven by utilization, pricing, and capacity growth. Most of the contracted 5GW capacity is expected to ramp up gradually over the next two to three years.

Citigroup still warns that Nebius is a high-risk asset, with risks including customer concentration, high capital expenditure intensity, GPU supply, and uncertain financing conditions. In other words, Nebius' AI computing power story remains clear, but the stock price will heavily depend on delivery pace.