The AI infrastructure boom is moving into a new phase. Demand for computing power is no longer the only constraint; access to electricity, data-center capacity, and financing are becoming just as important. Customers are committing billions of dollars years ahead of delivery, while scarce power supports pricing. For investors, contracted power is becoming a financial asset as much as an operating metric.
Wolfe Research believes Nebius Group (NASDAQ:NBIS | NBIS Price Prediction) can exit 2030 with more than $41 billion of annual recurring revenue (ARR) — nearly 10 times the $4.26 billion ARR shown for the third quarter of 2026 in its model. The thesis is aggressive, but its building blocks are visible.
Power Is Becoming Revenue #
Nebius just raised its year-end 2026 contracted-power target to 5 gigawatts, up from more than 4 GW. Management said it plans to deploy more than 1 GW annually beginning in 2027, and Reuters reported that the company believes it can sell its 2027 capacity at current terms.
The Wolfe model translates that power ramp into ARR growth: $6.3 billion in fiscal 2026, $13.9 billion in 2027, $22.8 billion in 2028, $31.8 billion in 2029, and $41.2 billion in 2030. That assumes Nebius can repeatedly convert electricity into revenue-producing capacity.
Customers Are Helping Fund the Buildout #
Nebius’ Q2 2026 shareholder letter said annual contract value per megawatt had climbed above $20 million for Q2 deals and above $40 million for short-term Q3 capacity deals. Four deals averaged more than $1 billion each, while 50% to 60% of their capex was self-financed through customer prepayments.
Nebius’ 2025 annual report provides an example. Microsoft‘s (NASDAQ:MSFT) agreement can generate as much as $17.4 billion through 2031 and includes roughly $7 billion of upfront payments. Meta Platforms‘ (NASDAQ:META) March agreement carried a potential contract value of about $27 billion.
That reduces Nebius’ financing burden while long-duration contracts provide revenue visibility.
The Margin Test Still Matters #
Admittedly, contracted power is not completed infrastructure. Nebius spent about $5.7 billion on capital expenditures in Q2 alone, according to its shareholder letter, while 2026 revenue guidance remains $3 billion to $3.4 billion.
The company also faces competition from Nvidia (NASDAQ:NVDA)-powered cloud providers such as CoreWeave (NASDAQ:CRWV). Nebius must turn scarce power into energized capacity quickly enough to preserve returns.
Surprisingly, its Q2 AI cloud adjusted EBITDA margin reached 50%. That gives the model some credibility, but sustaining those economics while adding more than 1 GW annually will be the key test.
Key Takeaway #
In short, Wolfe’s $41 billion ARR forecast is a high bar, but the math has a foundation. Nebius must convert 5 GW of contracted power into capacity, maintain pricing above $20 million per MW, and keep using customer prepayments to fund growth.
For investors, Nebius is a high-risk, high-upside AI infrastructure bet. The 10x ARR opportunity is worth watching, but the real signal will be whether margins hold as the gigawatts come online. Contact [email protected] for any questions or corrections.