Nebius Group Stock Soars on Microsoft AI Infrastructure Deal

Nebius Group N.V. (NASDAQ: NBIS) stock is trading significantly higher in pre-market activity following the announcement of a multi-year agreement with Microsoft to deliver dedicated AI infrastructure. The deal, valued at $17.4 billion over five years, will see Nebius providing GPU capacity from its new data center in Vineland, New Jersey, starting later this year, triggering a surge in market confidence.

Price Targets

Prior to the market open, NBIS shares were up approximately 46%, reflecting the market's positive reaction to the news. This surge builds on the stock's already impressive year-to-date performance, which saw gains of 109.96% leading up to this announcement. The market views this agreement as a substantial validation of Nebius's strategy and capabilities in the rapidly expanding AI infrastructure sector.

The agreement with Microsoft is structured as a committed contract, further solidifying Nebius's revenue visibility. The company plans to finance the associated capital expenditure through a combination of cash flow generated by the deal and the issuance of debt secured against the contract. The credit quality of Microsoft as a counterparty is expected to enhance the terms of this debt financing. Nebius is also exploring additional financing options to potentially accelerate its growth beyond initial expectations and will provide further updates on its financing strategy in due course.

Beyond this landmark deal, Nebius has been actively expanding its AI infrastructure footprint. Recent initiatives include plans to construct a 300 MW data center in New Jersey and incremental capacity additions in Kansas City and Keflavik, Iceland. These expansions demonstrate the company's commitment to meeting the growing demand for AI computing resources across both the United States and Europe. In Europe, Nebius is investing over $1 billion to build AI infrastructure, including a new GPU cluster in Paris featuring NVIDIA H200 Tensor Core GPUs.

Financially, Nebius has demonstrated strong performance. In Q2 2025, the company reported revenue of $105.1 million, a 625% year-over-year increase and a 106% quarter-over-quarter surge. The company also achieved positive Adjusted EBITDA in its core business ahead of schedule, highlighting its operational efficiency. This growth is supported by strategic equity financing, including a $700 million private placement secured in December 2024 from institutional investors such as Accel, NVIDIA, and Orbis Investments.

Nebius is strategically positioning itself as a neutral AI cloud alternative, fostering partnerships with key industry players like NVIDIA, OpenAI, and Microsoft. This approach, characterized by shorter contract terms and greater customer data control, appeals particularly to startups and enterprises concerned about data sovereignty, setting it apart from hyperscale cloud providers that may compete with their AI models.

Analyst Summary: Bull and Bear Cases

Looking ahead, Nebius projects a revenue compound annual growth rate (CAGR) above 50% from 2025 to 2030, with AI infrastructure expected to drive approximately 90% of total revenue by 2030, reaching $5.9 billion. The market’s enthusiastic response to the Microsoft deal underscores the significant potential for Nebius in the AI infrastructure space. The deal not only provides substantial revenue visibility but also enhances the company's credibility and attractiveness to other potential clients and investors, suggesting continued positive sentiment around the stock.