Shares of Nebius Group (NBIS) soared more than 51% to $96.75 on Tuesday after the Amsterdam-based company announced a $17.4 billion, five-year agreement to supply artificial intelligence infrastructure to Microsoft (MSFT).
If Tuesday’s stock gains hold, the company is set to add about $7.7 billion to its $15.3 billion market capitalization.
The landmark partnership underscores surging demand for AI data centers as businesses accelerate efforts to advance generative AI.
Nebius Chief Executive Arkady Volozh said the agreement would be transformative for the company’s growth trajectory.
“The economics of the deal are attractive in their own right, but, significantly, the deal will also help us to accelerate the growth of our AI cloud business even further in 2026 and beyond,” Volozh noted.
First major long-term contract for Nebius; could attract more prominent customers
Nebius described the Microsoft contract as its first large-scale, long-term deal with a major technology company, suggesting more such partnerships may follow.
If Tuesday’s stock gains hold, the company is set to add about $7.7 billion to its $15.3 billion market capitalization.
Analysts welcomed the development, saying it cements Nebius’s position as a leader in the emerging “neocloud” space.
“Nebius’s $17.4 billion contract with Microsoft is further evidence that the company is the leading neocloud player,” said D.A. Davidson analyst Alexander Platt.
He added that Nebius was well-positioned to attract other prominent customers, including hyperscalers or frontier AI labs, as it builds additional data center capacity.
As part of the Microsoft deal, Nebius will provide dedicated capacity from its new data center in Vineland, New Jersey, starting later this year.
Platt said Microsoft is expected to take the “lion’s share” of that facility’s output, while any additional major customer announcements could accompany new data-center builds in other regions.
Microsoft moves to expand AI capacity
Microsoft has repeatedly flagged shortages in AI cloud infrastructure, citing overwhelming demand across its Azure platform.
The company has faced supply constraints due to limited access to Nvidia (NVDA) graphics processing units, critical for AI workloads.
According to Platt, the Nebius arrangement is designed primarily to boost capacity for Microsoft Azure rather than to support OpenAI workloads.
The deal allows Microsoft to secure cloud infrastructure without increasing capital expenditures.
“We believe the trend is clear—capex is out and off-balance-sheet arrangements with external debt are the way forward,” said Gil Luria, another analyst at DA Davidson.
Microsoft has taken a similar approach with CoreWeave (CRWV), striking a multibillion-dollar deal to expand its AI computing resources. CoreWeave also maintains a substantial contract with OpenAI.
A growing neocloud ecosystem
Nebius’s business model is centered on providing full-stack AI cloud services using Nvidia computing.
It offers AI developers the hardware, software, and services necessary to train and deploy models.
Luria pointed to reports that Meta (META) has expressed interest in similar neocloud partnerships, arguing that the appeal lies in rapid execution.
“Both companies have their hands full with existing data-center projects, so by leveraging management expertise at these neoclouds they can satisfy demand more quickly,” he said.
“They are also taking shrewd advantage of the frothy abundance of debt capital chasing AI deals at rates that likely do not reflect the level of risk.”
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