Nebius Surges 50% on Multi-Year Microsoft Deal

Nebius Group, a fintech company, has signed a multi-year deal with Microsoft, leading to a 50% rally in its stock. The deal is expected to boost Nebius' capabilities and set up a "rocketship surge" in the company's stock. This development comes as the AI bubble reaches an extreme greed stage.

Nebius Group N.V. (NBIS), a fintech company specializing in AI infrastructure, has seen its stock price surge by 50% following a multi-year deal with Microsoft Corp. The agreement, announced on Monday, involves Nebius delivering AI infrastructure to Microsoft from its new data center in Vineland, New Jersey. This strategic partnership is expected to bolster Nebius' capabilities and set the stage for significant growth in the company's stock price.

The deal, which is part of a broader trend of large tech companies investing in AI infrastructure, is a major win for Nebius. The company's stock price surged to a new all-time high, reaching $98.68 before trimming gains to end the day at $95.72. The deal is expected to finance the capital expenditure associated with the contract through a combination of cash flow from the deal and the issuance of debt. Nebius is also evaluating additional financing options to accelerate its growth.

The announcement comes at a time when the AI bubble is reaching an extreme greed stage, as seen in the recent rally of Nebius' stock. However, the deal with Microsoft is not just about immediate gains; it is also about positioning Nebius as a key player in the AI infrastructure market. The company's CEO, Arkady Volozh, expressed his optimism about the deal's potential to accelerate the growth of Nebius' AI cloud business in the coming years.

Despite the recent gains, Nebius still faces challenges. The company's historical operating margins have been volatile, and its 2025 adjusted EBITDA is expected to remain negative. However, the company's strong balance sheet, with $2.4 billion in cash reserves, provides a solid foundation for long-term growth. The deal with Microsoft is a significant step towards achieving this growth, and it is likely to be a catalyst for further stock price appreciation.

In conclusion, Nebius Group N.V. has made a strategic move with its deal with Microsoft. While the AI bubble may be at an extreme greed stage, the deal with Microsoft is a well-timed boost for Nebius' capabilities and growth prospects. Investors should keep a close eye on Nebius as it navigates this exciting period in its history.