Nebius Group (NBIS) shares surged to $96.75 on Tuesday, up more than 51%, surged to $96.75 after the Amsterdam-based company announced a five-year agreement to supply artificial intelligence infrastructure to Microsoft (MSFT).
If stakes were acquired on Tuesday, the company plans to add about $7.7 billion to its $15.3 billion market capitalization.
The Landmark Partnership highlights the burgeoning demand for AI data centres as businesses accelerate their efforts to promote generation AI.
Nebius CEO Arkady Volozh said the agreement was transformative for the company's growth trajectory.
“The economics of trading are attractive in and of itself, but to a great extent, this transaction will also help accelerate the growth of the AI cloud business from 2026 onwards,” Volozh said.
Nebius' first major long-term contract. It can attract more prominent customers
Nebius described the Microsoft deal as the first large, long-term deal with a major technology company, suggesting that such a partnership could continue.
If stakes were acquired on Tuesday, the company plans to add about $7.7 billion to its $15.3 billion market capitalization.
Analysts welcomed the development and said they cemented Nebius' position as a leader in the emerging “neoclau” space.
“Nebius' $17.4 billion contract with Microsoft is further evidence that the company is a leading neo-cloud player,” said Alexander Platt, analyst at Da Davidson.
He added that Nebius is well positioned to attract other prominent customers, such as Hyperscalers and Frontier AI Labs, to build additional data center capacity.
As part of a Microsoft transaction, Nebius will provide dedicated capacity later this year from a new data center in Vineland, New Jersey.
Pratt said Microsoft is expected to acquire a “Lion's share” of the facility's production, but the announcement of additional key customers could be accompanied by new data center builds in other regions.
Microsoft moves to expand AI capacity
Microsoft has repeatedly flagged the lack of AI cloud infrastructure, citing overwhelming demand across the AIClude platform.
The company faces supply constraints due to limited access to NVIDIA (NVDA) graphics processing units, which are critical to AI workloads.
According to Platt, Nebius deployments are primarily designed to increase the capacity of Microsoft Azure, rather than supporting Openai workloads.
This transaction allows Microsoft to protect its cloud infrastructure without increasing capital expenditure.
“I believe this trend is clear. Capex is out and a sheet arrangement that is not balanced with external debt is the way forward,” said Gil Luria, another analyst at Da Davidson.
Microsoft has taken a similar approach to CoreWeave (CRWV) and is attacking billion-dollar deals to expand its AI computing resources. CoreWeave also maintains a substantial contract with Openai.
The Growing Neo-Cloud Ecosystem
Nebius' business model focuses on providing full-stack AI cloud services using NVIDIA computing.
Provide AI developers with the hardware, software and services needed to train and deploy models.
Luria reported that Meta (Meta) has expressed interest in a similar Neocloud partnership, claiming that the appeal is on expedited execution.
“As both companies are full of existing data center projects, we can leverage management expertise with these neoclaws to meet demand more quickly,” he said.
“They also have a wise advantage in the bubble-rich debt abundance that chases AI trading at rates that are likely not reflecting the level of risk.”
Post Nebius first appeared on Invezz after surged 51% after the $17.4 billion Microsoft AI agreement and increased the number of previously seen neo-cloud deals
