Nebius: Microsoft Deal Crushes Bear Thesis, A Bear Turns Bullish

The Microsoft-Nebius deal isn’t just a handshake—it’s a seismic shift in the AI cloud sector that’s turning skeptics into believers. , New Jersey data center, Microsoft is not only fortifying its Azure AI platform but also validating a broader thesis: AI infrastructure is the new oil, and Nebius is sitting on a gusher. For investors who once doubted Nebius’s ability to scale, this partnership is a wake-up call.

Strategic Inflection Point: From Skepticism to Scalability

Nebius’s transformation from a Yandex spin-off to a critical player in AI infrastructure began with a strategic inflection point in Q2 2025. , while its core AI infrastructure business turned positive on Adjusted EBITDA ahead of schedule [1]. This wasn’t just growth—it was a signal that Nebius had cracked the code for scalable, profitable AI infrastructure.

The Microsoft deal accelerates this trajectory. , Nebius is positioning itself as a global AI infrastructure hub [2]. The partnership also taps into Microsoft’s Azure AI and OpenAI ecosystems, creating a flywheel effect: more GPU capacity drives more AI services, which in turn attract more enterprise clients. , a figure that now looks conservative given the urgency of AI adoption [2].

Valuation Re-Rating: From Doubt to Demand

The bear case for Nebius hinged on its ability to monetize AI infrastructure at scale. . Investors are now recalibrating their models.

, . Meanwhile, the AI cloud sector itself is booming. . , companies that control the infrastructure—like Nebius—are commanding premium valuations.

The Microsoft deal also aligns with broader M&A trends. Big Tech is paying top dollar for AI infrastructure, . Nebius’s valuation re-rating isn’t an outlier—it’s part of a sector-wide shift.

Market Reactions: From Hesitation to Hype

The market’s response has been electric. , . These aren’t isolated wins—they’re symptoms of a sector in hyperdrive.

For Nebius, the catalysts are multiplying. Its expansion into Singapore and Southeast Asia [3], coupled with a funding round for its autonomous mobility subsidiary Avride, creates multiple re-rating triggers. Even institutional coverage upgrades could spark a rally, as seen in past tech darlings like Snowflake and Palantir.

The Bull Case: Why This Is Just the Beginning

The bear thesis is crumbling. Nebius’s EBITDA-positive core business, , . For investors, the question isn’t whether Nebius will succeed—it’s how quickly it will outpace expectations.

Source:

[1] Nebius Q2 2025: ARR Rises 73% QoQ, Why We're Still ... [https://mlq.ai/research/nebius-nbis-q2-2025-update/]
[2] Tech Stocks – Investment Ideas & Trades [https://www.techinvestments.io/p/tech-stocks-investment-ideas-and]
[3] Nebius Group (NBIS): The Key Catalysts That Could Drive ... [https://mvcinvesting.substack.com/p/nebius-group-nbis-the-key-catalysts]
[4] AI Trends 2025: Emerging Technologies, Market Insights ... [https://ts2.tech/en/ai-trends-2025-emerging-technologies-market-insights-and-industry-outlook]
[5] 33 Acquisitions in the Artificial Intelligence industry [https://flippa.com/blog/acquisitions/artificial-intelligence-industry-acquisitions/]
[6] 5 Insightful Analyst Questions From Nvidia's Q2 Earnings Call [https://finance.yahoo.com/news/5-insightful-analyst-questions-nvidia-053133317.html]