TLDR
- Nebius shares jumped nearly 50% overnight after a $19.4B Microsoft AI cloud deal.
- Agreement runs through 2031, expanding Nebius’s AI data capacity.
- Microsoft seeks to ease AI cloud shortages with Nebius’s infrastructure.
- Nebius will provide resources from a new New Jersey data center.
- The deal accelerates Nebius’s AI growth plans for 2026 and beyond.
Nebius Group N.V. (NASDAQ: NBIS) closed at $64.06 on September 8, 2025, down 2.15% for the day. However, shares surged to $95.65 in overnight trading, gaining 49.31% after Microsoft announced a multi-year AI cloud contract worth up to $19.4 billion.
The deal highlights Microsoft’s push to secure capacity for its AI services while propelling Nebius into the spotlight as a key player in AI infrastructure.
A Landmark Contract with Microsoft
The agreement is valued between $17.4 billion and $19.4 billion and runs through 2031. Under the terms, Nebius will provide Microsoft with dedicated AI cloud capacity from its new Vineland, New Jersey, data center starting later this year. For Microsoft, the deal helps address ongoing AI cloud shortages that have limited its ability to serve both internal projects and external Azure customers.
Growth Prospects for Nebius
Nebius, a spinoff from Russian internet giant Yandex, has been expanding its AI data centers to meet rising demand. Investors include Nvidia and Accel Partners, underscoring its strong industry backing. CEO Arkady Volozh emphasized that the deal not only offers attractive financial terms but also accelerates Nebius’s growth trajectory. The company expects its AI cloud business to expand significantly in 2026 and beyond, fueled by this contract.
Financing the Expansion
To meet the capacity demands of the Microsoft contract, Nebius plans to fund capital expenditures with cash flow generated by the deal and debt secured against the contract. The company is also evaluating other financing options to support faster-than-expected growth. Nebius stated it will provide updates on its financing strategy in due course.
Market Performance
The market reaction has been strong, with Nebius shares soaring nearly 50% after the announcement. Year-to-date, the stock has already risen 131.26%, significantly outperforming the S&P 500’s 10.43%. On a one-year basis, Nebius shares have surged 348.29%, compared to the S&P’s 20.09%. These gains highlight investor confidence in Nebius’s positioning within the booming AI infrastructure sector.
Microsoft’s AI Cloud Push
Microsoft has been ramping up capital spending to meet surging AI demand. Despite building out new data centers and acquiring additional capacity from firms like CoreWeave, it remains capacity-constrained. This shortfall has even limited Microsoft’s own AI product development and Azure AI offerings. Partnering with Nebius strengthens its ability to support both internal innovation and third-party AI customers, including OpenAI.
