Will Microsoft’s $17 Billion AI Partnership Rewrite Nebius Group’s (NBIS) Investment Narrative?

• Microsoft recently announced a landmark multi-year AI cloud infrastructure partnership with Nebius Group, involving an agreement valued at over US$17 billion and focused on delivering advanced GPU capacity from a new data center in New Jersey.
• This collaboration not only secures significant long-term revenue for Nebius Group but also highlights the shifting landscape as leading hyperscalers deepen ties with specialized AI infrastructure providers to meet soaring compute demand.
• We'll explore how Nebius Group's high-profile Microsoft contract could reshape its investment outlook and address previous concerns around growth sustainability.

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Nebius Group Investment Narrative Recap

To be a shareholder in Nebius Group, you need confidence in robust, sustained demand for AI cloud infrastructure and the company's ability to convert major contracts into recurring revenue growth. The widely publicized US$17 billion Microsoft partnership meaningfully accelerates scale and de-risks short-term revenue visibility, but it also intensifies the pressure on execution, particularly as Nebius ramps up capital spending to expand capacity, a key catalyst and risk in tandem.

Among recent announcements, the Microsoft contract stands out as the most relevant. Securing this five-year, multi-billion dollar deal not only anchors Nebius’s revenue base but directly addresses concerns about growth durability and its competitive positioning within the AI infrastructure industry.

However, investors should also weigh the contrast between rapid expansion and the costs tied to delivering next-gen GPU infrastructure at scale, particularly as...

Read the full narrative on Nebius Group (it's free!)

Nebius Group's outlook anticipates $3.2 billion in revenue and $428.7 million in earnings by 2028. This is based on an annual revenue growth rate of 133.9% and an increase of $238.5 million in earnings from the current $190.2 million.

Uncover how Nebius Group's forecasts yield a $153.00 fair value, a 18% upside to its current price.

Exploring Other Perspectives

Fair value estimates from 37 Simply Wall St Community members span from US$9.17 to US$333.76 per share. While many see room for further gains tied to Nebius’s growth in AI compute infrastructure, the wide dispersion of views reflects how differently investors assess the company’s revenue trajectory and execution risks.

Explore 37 other fair value estimates on Nebius Group - why the stock might be worth over 2x more than the current price!

Build Your Own Nebius Group Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• 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.
• Our free Nebius Group research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Nebius Group's overall financial health at a glance.

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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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