Nebius Group's stock experiences a significant boost after announcing a billion-dollar AI computing power agreement.
Shares of Nebius Group soared 30.72% in Thursday morning trading, climbing $45.53 to $193.75, after the artificial intelligence infrastructure company announced a major new computing power deal and rode a wave of bullish sentiment sparked by Microsoft's blockbuster cloud earnings results.
Nebius, a Netherlands-based "neocloud" provider that offers graphics processing unit-based AI computing capacity to enterprises and AI-native companies, said it had signed a multiyear agreement worth more than $1 billion to sell computing power to Reflection AI, with the deal running through 2029. News of the agreement sent shares climbing more than 4% in premarket trading, before the stock's gains accelerated dramatically once regular trading began Thursday morning.
The rally builds on additional momentum from Microsoft's quarterly earnings report, released Wednesday afternoon, which showed the technology giant's cloud business growing at its fastest pace in years. Microsoft reported fiscal fourth-quarter revenue of $90.01 billion, up 18% year over year and above the $87.62 billion analysts had expected. Microsoft Cloud revenue climbed 27% to $59.3 billion, while revenue from Azure and other cloud services surged 43%, an acceleration from 40% growth in the prior quarter. Azure's annual revenue surpassed $100 billion for the first time in the company's fiscal 2026, up 41% year over year. Because Nebius operates as a smaller peer to hyperscale cloud providers like Microsoft's Azure, Microsoft's strong results have reinforced investor confidence that underlying demand for AI computing infrastructure remains robust, a dynamic that has directly benefited smaller, more specialized providers like Nebius.
Thursday's surge caps an extraordinarily volatile stretch for Nebius shares over recent weeks. The stock has swung dramatically, running from the low $180s in mid-July to above $220, before sliding sharply back down to close near $148 on Wednesday, a steep correction that traders said reflected a rapid shift in sentiment from euphoria to caution. The stock's 52-week range spans from a low of $50.00 to a high of $299.86, illustrating the scale of volatility that has characterized Nebius shares throughout the year.
The company has drawn significant investor attention in recent months due to its high-profile relationship with Nvidia. Nvidia disclosed in a filing with the U.S. Securities and Exchange Commission that it owns 22,256,412 shares of Nebius through common stock and prefunded warrants, amounting to a 9.3% equity stake in the company valued at roughly $5 billion at the time of the disclosure. That stake, revealed publicly on July 20 through an SEC 13G filing dated July 13, sent Nebius shares up nearly 19% in a single session when the news first emerged. Nvidia and Nebius had previously announced a strategic partnership in March, when Nvidia committed a $2 billion investment intended to help Nebius deploy more than 5 gigawatts of AI data center capacity by the end of the decade.
Nebius has continued to expand its roster of major technology partnerships beyond Nvidia. The company has announced multibillion-dollar infrastructure deals with technology giants including Microsoft and Meta Platforms, and has said it has already secured more than $40 billion in total contracted revenue from customers across its business, a figure the company expects to grow substantially further as demand for AI computing infrastructure continues expanding.
Not every recent development has been positive for the stock. Meta Platforms' disclosed plans to sell excess AI computing capacity of its own rattled sentiment toward smaller neocloud providers like Nebius in recent weeks, contributing to a sharp pullback in the stock of between 12% and 15% at one point, though at least one analyst characterized that decline as an overreaction. Separately, a one-year moratorium on new hyperscale data center construction in New York state has introduced additional regulatory uncertainty into the company's expansion plans, though some analysts have suggested the restriction could simply redirect Nebius's growth toward other, more accommodating states rather than meaningfully constraining the company's overall trajectory.
Nebius has continued posting substantial revenue growth even amid the stock's dramatic price swings. The company reported revenue of $530 million for the prior fiscal year, a significant increase from $92 million the year before, and turned a profit of $102 million, reversing a loss of $641 million from the previous year. Over the trailing 12 months, Nebius has generated $878 million in total revenue, according to recent financial data, with the broader neocloud infrastructure market projected to exceed $53 billion by 2030.
Despite the company's strong revenue growth trajectory, some analysts have flagged Nebius's valuation as a significant risk factor for investors. With a market capitalization of approximately $50 billion prior to Thursday's rally, the stock has traded at more than 70 times trailing earnings and more than 50 times sales at various points this year, multiples that some market observers describe as reflecting elevated valuation risk given the stock's history of dramatic price swings tied to individual news events.
Nebius has also drawn attention as a favored trading vehicle among retail investors active on social media platforms, with the stock's wild price swings repeatedly tracking spikes in attention from communities such as WallStreetBets, reinforcing its reputation as a high-beta, momentum-driven stock closely tied to shifting sentiment around the broader artificial intelligence infrastructure trade.
With Nebius scheduled to report its own second-quarter earnings soon and additional major technology earnings still due later this week, investors are likely to continue watching closely whether the current wave of positive catalysts, spanning the new Reflection AI deal, Microsoft's strong cloud results and continued validation from Nvidia's equity stake, can help stabilize the stock's notoriously volatile trading pattern in the sessions ahead.
