Moment of recognition: what is Wall Street saying about Nebius after the Microsoft deal?

Wall Street analysts have called the deal between cloud provider for artificial intelligence Nebius Group and Microsoft a turning point for the company. In their opinion, the agreement between the startup of Yandex co-founder Arkady Volozh and the tech giant will be the main driver of Nebius' revenue growth in the coming years.

- Alex Platt, an analyst at DA Davidson, called the contract with Microsoft a moment of recognition for Nebius and noted that this could be the first in a series of major deals for the company. He said other hyperscalers and advanced AI labs may also show interest in Nebius' services in the neocloud segment - the next generation of AI-centric clouds - as the company continues to expand data center capacity with new projects. "This contract further confirms that Nebius is a leading player in the neocloud market," Platt said in a note cited by Bloomberg. He expects Nebius will be able to attract another large customer from hyperscalers or advanced AI labs in the near future. DA Davidson reiterated a "buy" recommendation on Nebius shares with a target price of $75 - up 17% from the last close, Sept. 8.

- Goldman Sachs also reiterated a "buy" rating on Nebius shares with a target price of $77, calling the agreement with Microsoft an important catalyst for the stock's growth. According to the bank, the contract will be a key growth driver for Nebius' AI infrastructure business, and especially for demand for its GPU-as-a-Service, which should accelerate revenue growth. Goldman Sachs believes that the deal's scale and flexible financing terms will allow the company to expand capacity faster than originally planned, and that cash flows from the contract will help cover construction costs. Goldman emphasized that the terms of the deal provide strong margins and set the stage for accelerated growth of Nebius' cloud-based AI services in 2026 and beyond.

- BWS Financial analyst Hamed Khorsand raised his target price on Nebius shares to $130 from $90, reiterating a "buy" recommendation. His new target is 26% above the last closing price and a third above the price before the announcement of the deal with Microsoft. It said the contract was a milestone for Nebius and provided unprecedented visibility into its long-term revenue potential, de-risking its capacity expansion plans. Horsand noted that Microsoft will utilize nearly all of the capacity of Nebius' New Jersey facility. He also believes the company is now better positioned to attract major new customers, including hyperscalers and advanced AI labs, through future greenfield data center projects.

The Netherlands-based AI startup Nebius Group, founded by Kazakhstan native and Yandex co-founder Arkady Volozh, signed a multibillion-dollar contract with Microsoft on September 8 to provide infrastructure for the development of artificial intelligence. Under the five-year agreement, Nebius will provide Microsoft with $17.4 billion worth of GPU-based computing power (used to work with AI). The total value of the deal could reach $19.4 billion if Microsoft buys out additional resources, SEC filings show. Access to dedicated infrastructure on GPU corporation will get through a new data center Nebius in New Jersey, the launch of which is scheduled for the end of 2025.

Against the backdrop of this agreement, Nebius securities on the Nasdaq exchange in the U.S. on September 9 soared by almost 50% (to $95.7), renewing the record. Since the beginning of the year, the company's market value has risen by almost 250%.

The current share price is already 7% above the Wall Street consensus estimate of $89.4. All five analysts who have Nebius shares under research coverage recommend buying them (four Buy ratings and one Overweight).

This article was AI-translated and verified by a human editor