Nebius Group (NasdaqGS:NBIS): Valuation in Focus After Landmark $3 Billion Meta AI Infrastructure Deal

Nebius Group (NasdaqGS:NBIS) has just inked a $3 billion, five-year deal to deliver AI infrastructure to Meta Platforms, following its larger agreement with Microsoft. This move signals sustained demand from influential technology partners.

See our latest analysis for Nebius Group.

Despite locking in major new contracts and rolling out game-changing AI infrastructure, Nebius Group’s share price has seen a sharp pullback this month, with a 1-month share price return of -26.4%. However, the longer-term momentum remains impressive, as its total shareholder return for the past year stands at a remarkable 374.7%. This suggests continued belief in its growth story, even with the current bout of volatility.

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Despite impressive recent wins and ambitious expansion, investors now face a critical question: Is Nebius Group trading at a discount to its long-term potential, or is the market already reflecting the future growth story in the current price?

Most Popular Narrative: 49.7% Undervalued

With Nebius Group closing at $83.54, the most widely referenced narrative puts its fair value far higher, suggesting substantial upside versus today’s price. What is driving such a strong outlook for Nebius’s valuation? Review the quote below to see the catalysts behind the majority viewpoint.

Bullish analysts have raised their price targets following the landmark multi-billion dollar contract Nebius secured with Microsoft, underscoring the company's distinctive positioning in delivering large-scale dedicated capacity. Strong reliability metrics are regarded as a significant and possibly underappreciated driver behind Nebius selling out much of its available capacity for the upcoming quarters, supporting robust utilization and pricing power.

Read the complete narrative.

Want to see what is driving this striking valuation? The real story involves ambitious projections for growth, margin expansion, and a future earnings multiple that might surprise even seasoned tech investors. Uncover which numbers gave analysts the confidence to call Nebius nearly half off its projected value.

Result: Fair Value of $166.00 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, lingering risks remain, such as execution hurdles in scaling new contracts and mounting competition that could challenge Nebius Group’s ambitious growth trajectory.

Find out about the key risks to this Nebius Group narrative.

Build Your Own Nebius Group Narrative

If you prefer your own angle or want to test the numbers firsthand, you can build a personalized narrative in minutes. Do it your way

A great starting point for your Nebius Group research is our analysis highlighting 3 key rewards and 3 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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