Finance

Nebius Group’s 350% Surge: Can the AI Infrastructure Player Outpace the Magnificent Seven?

Nebius Group’s stock soared 350% this year after a $17.4B cloud deal with Microsoft, drawing investor focus.

byAndres Castro

November 1, 2025, 3:44 PM

Hands holding a smartphone with a stock chart, a computer monitor with charts behind.

Analyzing stock market data on a smartphone and computer. By MDL.

Executive Summary

Nebius Group’s shares have climbed nearly 350% this year, largely fueled by a significant five-year, $17.4 billion cloud deal with Microsoft, solidifying its position in the AI infrastructure market.

The company’s business model involves offering AI infrastructure as a service by procuring high-performance GPUs and renting access through a cloud-based platform, competing with CoreWeave and Oracle.

Investors are keenly anticipating Nebius’s third-quarter earnings call for new financial guidance, deeper insights into the Microsoft partnership, potential new business with other hyperscalers, and details on capital allocation for future infrastructure expansion.

The Story So Far

Nebius Group operates in the rapidly expanding AI infrastructure market, providing AI infrastructure as a service by procuring GPUs and renting access through a cloud-based platform. The company’s significant growth, including a nearly 350% stock climb this year, is primarily fueled by a substantial five-year, $17.4 billion cloud deal with Microsoft, which has far exceeded its previous revenue targets. Investors are now keenly focused on the upcoming third-quarter earnings call for new financial guidance, details on the Microsoft partnership, and potential future deals, all of which are critical for understanding the company’s continued expansion in the capital-intensive AI sector.

Why This Matters

Nebius Group’s substantial stock surge, fueled by a $17.4 billion Microsoft deal, underscores the immense demand and growth potential within the AI infrastructure market, positioning the company as a pivotal player. The upcoming earnings call is crucial for investors seeking clarity on the Microsoft partnership, potential diversification with other major cloud providers, and the company’s capital strategy for future expansion, though analysts advise caution regarding potential stock volatility due to high retail investor interest.

Who Thinks What?

Current investors are highly optimistic about Nebius Group, driving its stock up significantly due to a major cloud deal with Microsoft, and are eagerly awaiting the upcoming earnings call for new financial guidance and potential diversification insights.

Nebius Group management is experiencing accelerated growth, having significantly surpassed previous annual recurring revenue targets due to the Microsoft partnership and expanding its data center footprint, indicating strong confidence in its AI infrastructure as a service model.

Adam Spatacco, a technology analyst, advises caution for Nebius Group, suggesting that its popularity among retail investors could lead to heightened volatility, and recommends that long-term investors wait for management’s post-earnings commentary for more opportune entry valuations.

Nebius Group (NASDAQ: NBIS) has seen its shares climb nearly 350% this year, fueled by a significant five-year, $17.4 billion cloud deal with Microsoft. The company, a pivotal player in the rapidly expanding artificial intelligence (AI) infrastructure market, is scheduled to report its third-quarter earnings on November 11, with investors closely watching for new financial guidance.

Market Performance and Business Model

As of late October, Nebius Group’s stock had surged by 346% year-to-date, positioning it as a notable performer beyond the established “Magnificent Seven” technology giants. The company, with a market capitalization of $33 billion, operates by offering AI infrastructure as a service. This involves procuring high-performance graphics processing units (GPUs) from Nvidia and then renting access to this hardware through a cloud-based platform.

Nebius primarily competes with CoreWeave and Oracle in the AI infrastructure space, with Iren also being a competitor to a lesser extent.

Strategic Growth and Microsoft Partnership

Nebius has significantly expanded its data center footprint over the past year, with operations now spanning Kansas City, New Jersey, Iceland, France, Finland, and Israel. The recent multi-billion-dollar agreement with Microsoft for data center capacity has substantially surpassed Nebius’s previous management target of reaching $1 billion in annual recurring revenue (ARR) by December, indicating a period of accelerated growth.

Anticipated Earnings Call Insights

During the upcoming third-quarter earnings call, investors are expected to focus on several key areas. Commentary regarding the Microsoft partnership will be crucial, particularly any details on how this collaboration might deepen over time. Analysts will also be listening for any indications of new business with other major cloud hyperscalers, such as Amazon Web Services (AWS) or Google Cloud Platform, which could diversify Nebius’s revenue streams beyond its significant concentration with Microsoft.

Further attention will be paid to Nebius’s balance sheet strength, given that building AI infrastructure is capital-intensive. Management’s insights into the expected costs of new capacity buildouts, its capital allocation strategy, and the anticipated timeline for return on investment from this infrastructure will be vital. There is also anticipation for new financial guidance, potentially a five-year ARR target, which could signal management’s long-term optimism regarding its ability to secure more hyperscaler clients and AI developers.

Analyst Outlook

While Nebius Group is well-positioned to benefit from the substantial tailwinds in the AI infrastructure market, projected to reach $7 trillion over the next five years, some analysts advise caution. Adam Spatacco, a contributing technology analyst, notes that Nebius has become a favored stock among retail investors, which could expose it to heightened volatility driven by market hype. Spatacco suggests that long-term investors may find more opportune entry valuations after reviewing management’s commentary during the upcoming earnings call.