Nebius Group (NBIS), a cloud and infrastructure company, announced that it will provide Microsoft (MSFT) with GPU capacity worth $17.4 billion over a five-year period. Microsoft may also buy more services that would lift the value to $19.4 billion. After the news, Nebius’ stock soared 45% in after-hours trading.
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The agreement gives Microsoft access to dedicated GPU power from Nebius’ new data center in Vineland, New Jersey. Service will begin later this year. Nebius runs on Nvidia (NVDA) chips and offers cloud tools, helping developers build and run AI models. With this setup, Microsoft gains another steady source of compute supply.
Growing Demand for AI Capacity
The deal comes as demand for AI hardware grows at a fast pace. Firms that train and deploy large models need more graphics chips and cloud storage. By locking in capacity, Microsoft can secure resources for its Azure cloud and its AI partners.
At the same time, Nebius gains long-term revenue that will support its expansion plans. Chief Executive Arkady Volozh said the contract will help the firm speed up growth in 2026 and beyond. Investors saw the agreement as proof of strong future demand.
Meanwhile, Microsoft is still the largest client of CoreWeave (CRWV), which also supplies Nvidia-based GPU cloud service. That makes the Nebius deal part of a broader move to spread supply sources. Earlier this year, CoreWeave denied media reports that it faced contract cuts from Microsoft.
Market Impact
Nebius, based in Amsterdam, was formed after a split of Yandex’s assets. It now focuses on AI infrastructure and services. The deal highlights how suppliers like Nebius and CoreWeave are gaining ground by meeting the rising need for GPU power. With stock up sharply, Nebius joins a small set of firms drawing major contracts from the largest cloud buyers.
Is NBIS a Good Stock to Buy?
According to the Street’s analysts, Nebius sports a Strong Buy consensus, with an average NBIS stock price target of $77.80. This implies a 21.45 upside from the current price.
