Nebius Group Surges 8.7% Amid AI Buying Spree and $18B Microsoft Deal

Nebius Group (NBIS) surged 8.72% on Thursday to $132.64, driven by a $18 bln cloud computing deal with Microsoft and strong demand from AI firms. The company plans to deliver capacity from its new data center in Vineland, NJ, using a combination of cash flow and debt financing. Its recent funding of $1.15 bln will enable faster growth than planned.

Nebius Group (NBIS) saw its stock price rise by 8.72% to $132.64 on Thursday, driven by a significant cloud computing deal with Microsoft and strong demand from AI firms. The company plans to deliver capacity from its new data center in Vineland, New Jersey, utilizing a combination of cash flow and debt financing. Nebius Group recently secured $1.15 billion in funding, which will enable faster growth than initially planned.

The deal with Microsoft, valued at $18 billion, positions Nebius as a key player in the AI infrastructure market. The agreement will see Nebius supply dedicated GPU and AI capacity to Microsoft's Azure infrastructure from its new facility through 2031. This deal underscores Nebius's ability to support enterprise-grade AI workloads at scale, a capability that has drawn significant investor attention.

Nebius's stock has been on a remarkable upward trajectory, with a 764% increase over the past year and a 345% year-to-date gain. This surge is attributed to the company's rapid expansion in GPU-based cloud infrastructure and its strategic partnerships. The company's market capitalization has ballooned to $31.38 billion, reflecting investor confidence in its growth potential.

Financial analysts have been bullish on Nebius, with a fair value estimate of $153, suggesting the stock may be undervalued. The company's trailing twelve-month revenue stands at $249.3 million, with analysts expecting a 392% annual increase this year and up to $1.68 billion in 2026. Nebius's strong liquidity position, with $1.68 billion in cash and a manageable debt-to-equity ratio of 32.43%, supports its aggressive expansion plans.

However, intense competition and tighter regulations could pose challenges to Nebius's growth trajectory. The company's high price-to-book ratio of 8.5x and a P/E ratio of 160.38 indicate that investors are willing to pay a premium for forward momentum. Despite these high valuations, Nebius's strong performance and strategic partnerships suggest that it is well-positioned to continue its growth trajectory.