SA analysts reevaluated their ratings on Nebius Group (NASDAQ:NBIS) this week after the Dutch company inked a $17.4B deal with Microsoft (MSFT) to provide AI infrastructure to the U.S. tech giant, sending its shares nearly ~50% higher on Tuesday.
While the multi-year hyperscaler agreement prompted many analysts to turn bullish on the Amsterdam-based AI infrastructure company, others sounded a more cautious tone, citing the stock’s premium valuation.
The Bulls
“The Microsoft deal alone could add $3.5–$3.9B in annual revenue, tripling 2026 projections and bringing valuation multiples in line with peers,” wrote SA analyst Bashar Issa in Nebius: Microsoft Contract Resets Multiples (Rating Upgrade). “At $91 per share, NBIS’ market cap stands at roughly $ 22 billion, which is justified when considering the $3.5 to $3.9 billion in incremental annual business from the new contract.”
“The deal positions NBIS for further upside if it secures additional hyperscaler contracts, potentially driving a re-rating to $147 per share,” added SA Investing Group Leader Julian Lin in Nebius: Microsoft Deal Crushes Bear Thesis; A Bear Turns Bullish. “Even after the large run-up, I am of the view that the market has still not woken up to the significance of this deal.”
“The contract will be financed through a mix of Microsoft prepayments and secured debt, with manageable capital needs and no major financing obstacles foreseen,” noted Denis Buivolov in Nebius: Breaking Down The Microsoft Deal. “Rental economics are highly favorable, with strong unit economics compared to industry benchmarks, supporting robust revenue generation for Nebius.”
“With the $17.4 billion Microsoft contract ramping up, Nebius’s upcoming quarters will naturally show step-change sales growth,” added Undercovered Deep Insights in Nebius Stock: Set For Hyperscaler Glory. “Despite recent stock dilution and a sharp price rally, NBIS remains a compelling long-term bet for investors seeking exposure to the AI cloud boom.”
The Bears
“Despite the growth story, NBIS stock now trades at steep valuation premiums, pricing in years of outsized growth and embedding significant risk at current levels,” opined The Techie in Nebius: Microsoft Deal Is A Positive That’s Been Priced In (Rating Downgrade). “Given the stock’s +36% surge and high expectations, I recommend investors trim positions and lock in profits.”
“NBIS’s valuation has soared, now trading at a hefty premium, with much of the deal’s upside already priced in by the market,” wrote SA Investing Group Leader JR Research in Nebius: AI Bubble Reaches Extreme Greed Stage. “While MSFT’s deal has undoubtedly provided the much-needed clarity that was previously missing from NBIS’s thesis, the risk/reward is skewed to the downside.”