Nebius Rides on Microsoft and Meta for $40 Billion in Commitments

Nebius Group has secured over $40 billion in customer commitments, primarily from two major clients: Microsoft and Meta Platforms. The contracts represent about 75 times Nebius's projected 2025 revenue of $530 million. Microsoft signed a deal in September 2025 for $17.4 billion in dedicated capacity through 2031, which could grow to $19.4 billion if additional services or capacity are purchased. Meta followed with a five-year deal in November for $3 billion, then added $12 billion in March, potentially rising to $15 billion under specific conditions.

While Nebius does not break down commitments by customer, filings reveal that Microsoft and Meta account for around $32 billion of the $40 billion in firm commitments. The remaining performance obligations surged to $34 billion by the end of March, partly due to Meta's $12 billion order. However, Nebius has also landed smaller deals with AI model makers Reflection and Cohere, indicating a slow expansion of its customer base.

The concentration of revenue is notable, with three unnamed customers contributing 24%, 21%, and 14% of second-quarter revenue. The risk of reliance on two major customers is mitigated by contractual agreements that require payments regardless of usage, unless Nebius fails to meet delivery deadlines. Nebius has delivered all tranches of capacity under the Microsoft deal, but Meta's $12 billion order is still being built on Nvidia's Vera Rubin platform, with discounted fees for late delivery.

The contracts serve as collateral for Nebius's expansion plans, with management targeting $20 billion to $25 billion in capital spending for 2026. However, only 36% of the $37.5 billion backlog is expected to convert to revenue by June 2028. With shares near $243, about 19% off their 52-week high, Nebius is valued at approximately $64 billion. The stock price suggests expectations for more significant contracts beyond those from Microsoft and Meta.