Nebius Group (NBIS) has a 'huge opportunity' to benefit from the fast-growing AI infrastructure-as-a-service market, BofA Securities said Tuesday in a report, initiating coverage of the stock with a buy rating.

Nebius is well-positioned to win customers because it's one of the few platforms built specifically to run large, GPU-heavy AI jobs, and already counts Microsoft (MSFT) and Meta Platforms (META) as clients, the report said.

The company's ability to link GPUs across locations and run them as one system gives it a competitive edge, the report said.

BofA expects revenue to surge sixfold in 2026 and triple in 2027 with operating margins turning positive in 2027. Improving free cash flow may stay negative through 2028 as the company continues heavy spending on data centers and hardware, the report said.

BofA set a $150 price target on Nebius stock.

Price: 115.51, Change: +1.35, Percent Change: +1.19