Nebius Joins the AI Elite After a $17.4 Billion Microsoft Pact

Key Points

• The multi-year agreement with Microsoft provides Nebius with an immense, long-term revenue stream that fundamentally reshapes its entire financial future.
• Securing this landmark partnership with a technology giant serves as the ultimate validation of Nebius's proprietary full-stack AI infrastructure platform.
• The company is strategically raising capital from a position of strength to fund the hyper-growth required to meet its new large-scale commitments.

In a market move that captured the attention of the entire technology sector, shares of artificial intelligence (AI) infrastructure provider Nebius Group NASDAQ: NBIS delivered a stunning performance on September 9th. The stock jumped 49.42% to close at $95.72, a dramatic climb that came on the back of extraordinary trading volume.

More than 88 million shares changed hands, a figure nearly nine times its daily average, signaling a wave of intense investor conviction. For a stock that has already seen a remarkable 245% year-to-date increase, this single-day event was an undeniable exclamation point.

The catalyst was the announcement of a multi-year, $17.4 billion agreement with Microsoft NASDAQ: MSFT. This is far more than just another large contract; it is a company-defining event that reshapes the financial future of Nebius and validates its position as a critical new force in the global AI infrastructure landscape.

Inside the Multi-Billion Dollar Handshake

The agreement between Nebius and Microsoft is transformative in its scale and scope. The core of the deal is a commitment from Microsoft, valued at $17.4 billion, for Nebius to supply dedicated GPU cloud infrastructure, the specialized, high-powered computing essential for developing and running advanced AI models. The terms also include a $2 billion option for Microsoft to purchase additional services or capacity, potentially raising the total value to an immense $19.4 billion.

The partnership extends through 2031, providing Nebius with an exceptionally clear and stable revenue stream for nearly a decade. To service the agreement, Nebius will utilize its new, purpose-built data center in Vineland, New Jersey, cementing a significant operational footprint in the United States.

To put the financial impact into perspective, the base value of the contract is greater than the company’s entire market capitalization of approximately $15.1 billion the day before the news broke. It also dwarfs the company’s own ambitious full-year 2025 annualized run-rate (ARR) guidance of $900 million to $1.1 billion. This single deal provides a backlog of revenue that fundamentally reorders Nebius’s financial trajectory.

Earning a Seat at the Cool Kids’ Table

While the financial figures are staggering, the strategic importance of the Microsoft deal is arguably even more significant. For an emerging player like Nebius, securing a contract of this magnitude from a hyperscaler is the ultimate technological endorsement. It serves as a definitive stamp of approval for the company’s full-stack platform, which combines proprietary software with in-house designed hardware to deliver high-performance AI compute. This win comes on the heels of a strong second-quarter earnings report, where the company’s core AI business achieved positive Adjusted EBITDA ahead of schedule, proving its operational model was already gaining traction.

This partnership also signals a crucial shift in the AI supply chain, placing Nebius firmly in the top echelon of independent infrastructure providers. While the news provided a tailwind for the sector, the market reaction was highly specific. Competitors like CoreWeave NASDAQ: CRWV saw a more modest 7.1% gain on the same day, indicating that investors view this as a company-altering win for Nebius, not a general lift for all players.

This powerful validation is further reinforced by Nebius’s established relationship with NVIDIA NASDAQ: NVDA. Having the leader in AI hardware as a prior investor lends a deep layer of technical credibility, which likely served as a key factor in Microsoft’s decision-making process.

Capitalizing on an Unprecedented Opportunity

Nebius moved quickly to support the rapid expansion required to fulfill the Microsoft contract. The company announced a plan to raise significant capital through a dual offering: a $1 billion public sale of its Class A shares and a $2 billion private placement of convertible senior notes.

This move should be viewed not as a sign of financial distress, but as a proactive and necessary strategy to fund hyper-growth. With $1.68 billion in cash on its balance sheet at the end of Q2, Nebius is raising this new capital from a position of strength. The proceeds are explicitly earmarked for acquiring the vast and costly amounts of hardware and expanding the data center footprint needed to meet its new commitments.

Demonstrating a sophisticated financial strategy, Nebius also stated its intention to secure a portion of the financing with debt backed by the Microsoft contract itself. By leveraging its partner's high credit rating, Nebius can likely obtain favorable borrowing terms, allowing it to scale its operations in a cost-effective manner.

From Potential to Performance

The landmark agreement with Microsoft has fundamentally de-risked the investment thesis for Nebius Group. The narrative has shifted from a company with high potential to one with proven, large-scale performance capabilities recognized by one of the world's largest technology firms.

The key focus for investors now pivots to execution. The timely buildout of the New Jersey data center and the successful deployment of capacity for Microsoft will be the critical metrics to watch in the coming quarters.

Analyst sentiment is already racing to catch up, with firms like BWS Financial raising their price target on NBIS to $130 following the news.

This contract provides a powerful and stable foundation for Nebius to pursue its ambitious growth targets, including its goal of securing over 1 GW of power by the end of 2026. For investors, Nebius has used one transformative deal to solidify its status as a critical and compelling player in the essential market of AI infrastructure.