Where Will Nebius Stock Be in 3 Years?

Core Viewpoint - Nebius has secured a significant multiyear, multibillion-dollar contract with Microsoft, which is expected to drive substantial growth for the company in the AI infrastructure market [2][6][8]. Company Overview - Nebius Group specializes in providing full-stack AI cloud infrastructure, utilizing Nvidia GPUs for customers to train and deploy AI models [4]. - The company has experienced a remarkable stock price increase of 393% over the past year, reflecting strong demand for AI data center capacity [1]. Contract Details - The contract with Microsoft is valued at a minimum of $17.4 billion, with potential to increase to $19.4 billion if additional services are purchased [6][7]. - Nebius will supply dedicated GPU infrastructure capacity through a new data center in New Jersey over the next five years [6]. Market Potential - The cloud infrastructure-as-a-service (IaaS) market is projected to reach $580 billion by 2030, while the platform-as-a-service (PaaS) market is expected to generate $600 billion by the end of the decade [5]. - Nebius is positioned to address both markets with its AI solutions, indicating strong growth potential [5][6]. Financial Projections - Nebius reported trailing 12-month revenue of just under $250 million, with a 545% increase in revenue to $156 million in the first half of 2025 compared to the previous year [9]. - The company anticipates an annualized run-rate revenue of $1 billion by the end of the year [9]. - If the Microsoft deal revenue is evenly distributed, Nebius could generate approximately $4 billion annually from Microsoft alone over the next five years [12]. Growth Expectations - Analysts expect Nebius's revenue to grow significantly, with projections estimating a top line increase of nearly 5.5 times between 2025 and 2028 [13]. - If Nebius achieves a revenue of $3.1 billion by 2028 and secures an additional $4 billion from Microsoft, total annual revenue could reach $7.1 billion [13]. Market Capitalization - Should Nebius trade at 8.5 times sales in 2028, its market cap could potentially reach $60 billion, nearly tripling its current market cap [14]. - Microsoft’s existing backlog of $368 billion in contracted cloud capacity suggests further business opportunities for Nebius in the future [14][15].