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Will Nebius Group's Mega AI Deals Power Its 2027 Growth Story?
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Key Takeaways
Nebius signed four landmark AI cloud deals averaging more than $1 billion each in the second quarter.
The agreements are expected to meaningfully contribute to Nebius revenues in 2027 and beyond.
Nebius plans to deploy more than 1 gigawatt of new capacity in 2027 while preserving pricing flexibility.
Nebius Group N.V. (NBIS - Free Report) appears to be laying a solid foundation for 2027 as strong demand for AI infrastructure drives large customer wins, rising capacity requirements and favorable pricing. During the second quarter of 2026, the company signed four landmark AI cloud agreements with Reflection, Cohere, a scaled U.S. new lab and a large U.S.-based quantitative trading firm. These contracts averaged more than $1 billion each and carried yields of roughly $20-$25 million per megawatt. Customer prepayments cover 50-60% of the associated capital expenditures.
On the last earnings call, management stated that these agreements will begin coming online later in 2026 and are therefore unlikely to materially affect the company’s 2026 revenue guidance. However, they are expected to meaningfully contribute to revenues in 2027 and beyond. Nebius also sees opportunities in shorter-duration capacity agreements, generally spanning up to six months, where customers with immediate high-value computing needs are willing to pay premiums of roughly $40-$50 million per megawatt and, in some cases, even more.
The company’s capacity expansion plans further strengthen the 2027 growth outlook. Nebius raised its year-end 2026 contracted power target to 5 gigawatts and believes its pipeline positions it among the few companies capable of adding more than 1 gigawatt of new capacity annually. Management plans to achieve that level of deployment in 2027.
Nebius has deliberately refrained from pre-selling all of its planned 2027 capacity. Management believes selling closer to deployment could enable the company to capture better pricing while retaining flexibility to serve short-term, higher-margin demand. The company said it could already have sold out its planned 2027 capacity, underscoring robust customer demand.
Nebius also expects its asset-light model, inference offerings and other high-value services to contribute a growing share of revenues while supporting higher margins. With strong pricing, sizable customer commitments and significantly greater capacity planned for 2027, the company appears well-positioned to translate its mega AI deals into another year of rapid expansion.
Taking a Look at NBIS’ Competitors
CoreWeave (CRWV - Free Report) is strengthening its AI infrastructure strategy through a multi-year agreement with Solidigm that provides priority access to enterprise SSD capacity. As AI models grow and inference workloads expand, storage capacity, performance and availability are becoming increasingly important alongside GPU resources. The agreement could help CoreWeave align storage expansion with its growing compute footprint, reducing potential bottlenecks and supporting timely infrastructure deployment. With major agreements involving Meta, Anthropic and Perplexity, CoreWeave is rapidly scaling its AI cloud platform. Securing storage capacity could provide an incremental competitive edge and help ensure storage availability keeps pace with its expanding AI infrastructure.
Microsoft (MSFT - Free Report) is strengthening its growth outlook through Azure’s expanding scale, accelerating AI monetization and diversified businesses. Azure surpassed $100 billion in annual revenue in fiscal 2026, while Intelligent Cloud revenue grew 32% in the fiscal fourth quarter. Meanwhile, Microsoft’s AI business surpassed a $37 billion annual revenue run rate, supported by Azure AI, Copilot and enterprise applications. Microsoft 365 Copilot paid seats exceeded 30 million, while GitHub Copilot reached 50 million users. Beyond cloud and AI, Productivity and Business Processes revenue grew 14%, supported by LinkedIn and Dynamics 365. This diversified growth could support sustained momentum and customer retention.
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Will Nebius Group's Mega AI Deals Power Its 2027 Growth Story?
Key Takeaways
Nebius Group N.V. (NBIS - Free Report) appears to be laying a solid foundation for 2027 as strong demand for AI infrastructure drives large customer wins, rising capacity requirements and favorable pricing. During the second quarter of 2026, the company signed four landmark AI cloud agreements with Reflection, Cohere, a scaled U.S. new lab and a large U.S.-based quantitative trading firm. These contracts averaged more than $1 billion each and carried yields of roughly $20-$25 million per megawatt. Customer prepayments cover 50-60% of the associated capital expenditures.
On the last earnings call, management stated that these agreements will begin coming online later in 2026 and are therefore unlikely to materially affect the company’s 2026 revenue guidance. However, they are expected to meaningfully contribute to revenues in 2027 and beyond. Nebius also sees opportunities in shorter-duration capacity agreements, generally spanning up to six months, where customers with immediate high-value computing needs are willing to pay premiums of roughly $40-$50 million per megawatt and, in some cases, even more.
The company’s capacity expansion plans further strengthen the 2027 growth outlook. Nebius raised its year-end 2026 contracted power target to 5 gigawatts and believes its pipeline positions it among the few companies capable of adding more than 1 gigawatt of new capacity annually. Management plans to achieve that level of deployment in 2027.
Nebius has deliberately refrained from pre-selling all of its planned 2027 capacity. Management believes selling closer to deployment could enable the company to capture better pricing while retaining flexibility to serve short-term, higher-margin demand. The company said it could already have sold out its planned 2027 capacity, underscoring robust customer demand.
Nebius also expects its asset-light model, inference offerings and other high-value services to contribute a growing share of revenues while supporting higher margins. With strong pricing, sizable customer commitments and significantly greater capacity planned for 2027, the company appears well-positioned to translate its mega AI deals into another year of rapid expansion.
Taking a Look at NBIS’ Competitors
CoreWeave (CRWV - Free Report) is strengthening its AI infrastructure strategy through a multi-year agreement with Solidigm that provides priority access to enterprise SSD capacity. As AI models grow and inference workloads expand, storage capacity, performance and availability are becoming increasingly important alongside GPU resources. The agreement could help CoreWeave align storage expansion with its growing compute footprint, reducing potential bottlenecks and supporting timely infrastructure deployment. With major agreements involving Meta, Anthropic and Perplexity, CoreWeave is rapidly scaling its AI cloud platform. Securing storage capacity could provide an incremental competitive edge and help ensure storage availability keeps pace with its expanding AI infrastructure.
Microsoft (MSFT - Free Report) is strengthening its growth outlook through Azure’s expanding scale, accelerating AI monetization and diversified businesses. Azure surpassed $100 billion in annual revenue in fiscal 2026, while Intelligent Cloud revenue grew 32% in the fiscal fourth quarter. Meanwhile, Microsoft’s AI business surpassed a $37 billion annual revenue run rate, supported by Azure AI, Copilot and enterprise applications. Microsoft 365 Copilot paid seats exceeded 30 million, while GitHub Copilot reached 50 million users. Beyond cloud and AI, Productivity and Business Processes revenue grew 14%, supported by LinkedIn and Dynamics 365. This diversified growth could support sustained momentum and customer retention.
NBIS Price Performance, Valuation and Estimates
Shares of Nebius have gained 120.2% in the past six months compared with the Internet – Software and Services industry’s growth of 27.1%.
Image Source: Zacks Investment Research
In terms of price/book, NBIS’ shares are trading at 5.15X, up from the Internet Software Services industry’s ratio of 3.7X.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for NBIS’ earnings for 2026 has been revised upward over the past 60 days.
Image Source: Zacks Investment Research
NBIS currently carries a Zacks Rank #3 (Hold).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.