NBIS Secures Huge Deal! Stock Surges

Microsoft has signed a deal worth up to $17.4 billion with AI infrastructure group Nebius, which will provide computing power for Microsoft’s AI business over the next five years.

 

The announcement, made after US market close on Monday, triggered a surge in Nebius’ stock, which at one point rose over 60% before settling at a 44% gain. Microsoft’s stock also edged up 0.21% in after-hours trading.  

 

 

Under the agreement, Microsoft may also gain additional service capacity from Nebius, potentially pushing the contract’s total value to approximately $19.4 billion. This deal underscores the tech industry’s massive demand for high-performance AI computing power.

Compute Competition

Nebius, currently valued at around $15 billion, was formed after Russia’s largest internet group Yandex spun off its overseas operations last year. Its core business includes providing Nvidia GPU chips and AI cloud services. Starting later this year, Nebius will supply Microsoft with dedicated GPU infrastructure capacity through a new data center in Vineland, New Jersey.  

 

Nebius CEO Arkady Volozh stated that the deal offers attractive economic benefits and, more importantly, will help accelerate the growth of its AI cloud business in 2026 and beyond.  

 

Beyond Nebius, Microsoft was previously the largest client of Nebius’ competitor, CoreWeave. Following Monday’s contract news, CoreWeave’s stock also rose about 5%, as the market sees this deal as further evidence of robust demand for AI infrastructure.  

 

From Microsoft’s perspective, the company announced in July that its annual AI capital expenditure will reach $120 billion, a significant jump from $88 billion last year and nearly four times the $32 billion spent in 2023, reflecting its strong focus on computing power.

Still Worth Buying?

The Microsoft-Nebius partnership means Nebius will provide dedicated computing power to Microsoft from its Vineland, New Jersey data center, with phased deployment beginning as early as later this year.

 

Microsoft has not disclosed the specific use of this computing power, but it’s widely believed to support its generative AI products and the expansion of Azure AI cloud services.  

 

 

For Nebius, this is a “game-changing” contract, securing substantial cash flow for years and laying the foundation for further expansion post-2026. As the AI wave continues, Nebius’ data center business is poised for rapid scaling.

 

For Microsoft, this deal is a critical step to address its computing shortage. Over the past year, demand for Microsoft’s AI cloud services has consistently outstripped supply, particularly for OpenAI model training and enterprise AI deployments, where computing bottlenecks have become a key growth limiter.  

 

Thus, this deal opens a clear growth path for Nebius while filling a critical infrastructure gap for Microsoft in the AI race.  

 

However, in the short term, there’s a risk of over-hype. Unless you’re an early mover, it’s advisable to watch and wait.$NBIS