Nebius Group Relies on Microsoft and Meta for $40 Billion in Commitments

Nebius Group, the AI cloud company, has secured over $40 billion in customer commitments, with the majority coming from just two major clients: Microsoft and Meta Platforms. Microsoft's contract, signed in September 2025, totals around $17.4 billion, potentially growing to $19.4 billion if additional services or capacity are purchased. Meta's agreements, signed in November 2025 and March 2026, amount to around $15 billion, including a $12 billion deal for dedicated capacity starting in early 2027.

Despite the substantial commitments, only about 36% of Nebius' backlog is expected to convert into revenue within the next two years. The company's revenue for 2025 was approximately $530 million, highlighting the significant gap between its current earnings and the long-term contracts. The concentration of revenue among a few customers is notable, with three unnamed clients accounting for 24%, 21%, and 14% of second-quarter revenue.

The contracts with Microsoft and Meta include provisions for upfront payments, with Microsoft agreeing to pay for capacity whether or not it uses it. This arrangement reduces near-term risk but places a heavy emphasis on Nebius' execution capabilities. The company's expansion plans, requiring $20 billion to $25 billion in capital spending for 2026, are largely funded by borrowing against these committed backlogs.

As of August, Nebius' stock price was around $243, roughly 19% off its 52-week high. The company's valuation suggests expectations of securing more substantial contracts beyond those with Microsoft and Meta. Analysts caution that while the current contracts provide a solid foundation, the stock price may be overestimating future growth without additional major deals.