Nebius Signs $27 Billion Five-Year Revenue Deal With Meta

Key Morningstar Metrics for Nebius Group

• Fair Value Estimate
  : $85.00
• Morningstar Rating
  : ★★
• Morningstar Economic Moat Rating
  : None
• Morningstar Uncertainty Rating
  : Very High

Nebius Group NBIS signed a $27 billion revenue deal to deploy capacity for Meta Platforms META over a five-year period.

Why it matters: Nebius will provide $12 billion of capacity across multiple locations for Meta, mainly Nvidia NVDA Vera Rubin GPUs, starting in 2027. For the remaining $15 billion, Nebius will first try to sell this capacity to third-party customers, with Meta acting as a backup buyer if the firm cannot do so.

• The fact that Meta is providing a fallback guarantee to purchase any unused capacity is more proof that demand for AI workloads remains very strong. This backup arrangement seems advantageous for Nebius, as trying to sell first to multiple third-party customers is beneficial, since enterprise clients normally pay higher GPU rental prices than large hyperscalers. It also provides optionality to diversify Nebius’ revenue base in the future.

The bottom line: We raise our fair value estimate to $85 per share from $70 as we raise our medium- and long-term revenue forecasts. Once fully scaled, this contract should bring $4 billion-$6 billion in annual recurring revenue over 2028-29. Considering Nebius normally earns $8 million-$10 million per megawatt, this deal should bring around 400-600 MW of extra IT capacity once fully ramped up.

• We now model sales of $11 billion in 2027 and $15 billion in 2028, compared with previous estimates of $8 billion and $11 billion, respectively. Our fair value estimate represents an enterprise value/sales multiple of 4.5 times for 2026 and 2.0 times for 2027. This is a meaningful discount to our estimates of how Azure or Amazon Web Services would be valued if they were independently listed companies.