Crossroads Capital LLC’s first-quarter 2026 letter puts the spotlight on Nebius Group N.V. (NBIS) and argues that a skeptical entry last year has turned into a fast-moving win as large-scale contracts and execution cleared key doubts; the fund posted positive performance in Q1 while keeping sizable gross and net exposures as special situations start to accelerate.
Crossroads reported the fund rose 4.2% net of fees and expenses for the quarter, with long-term compound returns since inception of about 21.3% gross and 17.1% net. By the end of March 2026, the firm listed non-delta adjusted gross exposure at 114.1% and net exposure at 73.3%, signaling an aggressive posture in a selective set of ideas. That mix of conviction and leverage framed how they described the portfolio heading into a period of rapid AI infrastructure deployment.
The letter also noted that stable market trends from the prior year were disrupted by geopolitical tensions linked to Trump’s increasingly unpredictable foreign policy, a development Crossroads said contributed to a roughly 4.3% drop in the S&P 500. Despite those headwinds, Crossroads found Q1 fundamentals broadly consistent with the thematic direction they’re backing, especially around AI infrastructure and partner-led demand. The firm emphasized it was comfortable holding core positions as special situations matured into clearer opportunities.
Nebius Group N.V. is presented as one of those positions that moved from speculative to strategic in a short window. The company builds full-stack infrastructure aimed at servicing AI workloads and has seen dramatic price action and rapid revenue acceleration. On May 22, 2026, NBIS closed at $214.77 per share, delivered a one-month return of 48.16%, and produced a 52-week gain of 456.54%, with a market capitalization reported at about $54.53 billion.
Crossroads singled Nebius out as a notable contributor and walked readers through how the bear case faded as execution unfolded. Their note explains why early skepticism made sense, and why a subsequent sequence of contract wins and commercial validation transformed the risk-reward picture. What follows is the firm’s own description of the position and how it evolved over the year.
“Nebius Group N.V. (NASDAQ:NBIS): It’s worth pausing to remember where this one sat a year ago. When we first bought NBIS in late 2025, the bear case wrote itself. Nebius was a freshly re-listed carve-out of Yandex, operating a modest data center with a few co-locations across Europe, and a customer book composed almost entirely of VC-backed AI natives and other small, unproven firms. No anchor customer. No enterprise counterparties worth the name. A small but growing fleet of Nvidia GPUs financed with cash the company was burning faster than it was generating. And the elephant in the room was that nobody had any real idea how the capital markets would treat a Russian-adjacent carve-out asking them to underwrite a multi-gigawatt buildout. You had to squint to see a business. What you could see was a team, a collection of good assets arguably trading below liquidation value, and an execution-based timing window.
One year later, the questions that defined that bear case have been answered in sequence, and not one of them broke the wrong way. Late in 2025, NBIS added META to its customer list with a ~$3B capacity-constrained contract. In March, that became a $27B five-year commitment in two pieces: $12B of dedicated capacity on one of the first large-scale Vera Rubin deployments starting in early 2027, and a further $15B in which Meta commits to backstop Nebius’s uncommitted third-party capacity as it comes online. That second piece matters more than the headline suggests, as it turns Meta into a floor buyer for speculative builds and collapses demand risk on capacity Nebius was already planning to scale. Combined with Microsoft, committed contract value now sits at roughly $46B against a platform that did $228M of revenue in Q4. The platform thesis is scaling as we speak, with AAA counterparties…” (Click here to read the full text)
Outside the investor letter, available holdings data showed 54 hedge funds reported positions in Nebius at the end of the prior quarter, down from 65, while company revenue surged year over year. Reported Q1 results indicated revenue growth of roughly 684% from the prior year to about $399 million, a sign the platform is moving from proof to scale. Crossroads notes those numbers while also flagging that other AI-related names may present different risk and upside profiles for investors.
For investors watching special-situation plays tied to AI infrastructure, Nebius now sits in the category of firms that were once dismissed as too risky and are being re-examined after anchor deals and revenue traction. Crossroads is keeping the position as contracts and execution unfold, and the firm’s letter suggests it still sees room for operational news to drive further re-rating. Readers are left with a clear reminder: execution matters, and contracts with large counterparties can quickly change how an investment story is viewed.
