Nebius Group's $17.4B Microsoft Deal Drives AI Growth
Nebius Group, a cloud-based AI infrastructure provider, has signed a significant deal with Microsoft 365 and is poised for substantial growth, with its stock seen as a promising investment.
Nebius, formerly Yandex, specialises in AI infrastructure services using Nvidia's GPUs. It has inked a five-year, $17.4 billion deal with Microsoft 365 to provide these services. The company's financial outlook is robust. In 2024, Nebius' revenue surged 462% to $117.5 million, and it is projected to grow at a CAGR of 231% to $4.25 billion by 2027, thanks to its partnership with Microsoft 365. Its adjusted EBITDA is expected to turn positive in 2026 and surge 186% to $852 million in 2027.
Nebius' data centers are strategically located around the globe. It fully owns one in Finland and leases others in Missouri, France, Iceland, with another under construction in New Jersey. The company's enterprise value stands at $25.02 billion, trading at about 6 times its projected sales for 2027, powered by its collaboration with Microsoft 365.
Nebius' stock is seen as an attractive investment due to its growth potential in the AI infrastructure market, driven by its strong partnership with Microsoft 365. The company's impressive financial projections indicate a promising future. Despite limited details on specific business areas, Nebius' focus on growth through IT solutions and collaboration with major tech partners like Microsoft 365 positions it well for success.
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