Nebius Group (NASDAQ: NBIS) saw its stock price surge by over 14% in extended trading following the announcement of a monumental $27 billion infrastructure deal with Meta Platforms. The stock jumped to $130, reaching its highest level since November 3 of last year, and has skyrocketed by over 630% from its 2025 low.
The Amsterdam-based neocloud provider confirmed the agreement, under which Meta will pay up to $27 billion over the next five years to access Nebius's GPUs, bolstering Meta's artificial intelligence capabilities. This partnership is scheduled to commence in early 2027. This new contract is in addition to a $3 billion deal signed between the two companies last year.
"We are pleased to expand our significant partnership with Meta as part of securing more large, long-term capacity contracts to accelerate the build-out and growth of our core AI cloud business," Nebius stated. The company also has significant existing deals with other tech giants, including Microsoft.
The rally was further fueled by a recent $2 billion investment from NVIDIA, seen as a major vote of confidence and a de-risking event for Nebius's future. Analysts are now significantly upgrading their financial forecasts for the company. The average estimate for the current quarter's revenue is $401 million, a staggering 625% year-over-year increase. Annual revenue is projected to jump 529% to over $3.3 billion, with some analysts forecasting revenue to reach $9.53 billion in the coming year.
However, the company faces the challenge of rising capital expenditures, which reached $2.1 billion in the last quarter, primarily driven by GPU and related hardware investments.
Despite the euphoria, a conventional Discounted Cash Flow (DCF) analysis suggests the stock may be overvalued. Using aggressive assumptions, including a 45% compound annual growth rate through 2030 and a weighted average cost of capital of 12.5%, the model yields an intrinsic value of approximately $94 per share. At $130, this implies the stock is trading at a 38% premium to its fundamental value, pricing in growth that may take years to materialize.
Wall Street remains largely bullish, with a consensus "moderate buy" rating and a mean price target of $154, suggesting a further 20% upside. The market appears to be paying a "security of supply" premium, as the Meta and Microsoft deals have effectively sold out Nebius's capacity for years, creating bond-like revenue certainty.
